Posted Aug 1, 2015 by Martin Armstrong
Socrates will provide three primary levels of service: Investor, Trader, and Institutional. The distinguishing factors are designed based upon needs. We will have the overall outlook and trend for the Investor; the Trader will have access to timing and price target objectives as well. At the Institutional level, we will provide portfolio construction, asset allocation, and two primary levels of service geared to either hedging (physical product or currency) or investment.
The advantage of Socrates is that there are no personal opinions, as it is not possible to forecast future trends on a consistent basis with an opinion. Being right or wrong once means nothing – only consistency matters.
Failing to comprehend that it is always TIME and PRICE is perhaps the largest mistake that people make. Those who ignorantly expect some correct forecast in only price are doomed for they fail to comprehend how markets function. We can forecast that gold will drop to $1,000 or rise to $2,300, but each is irrelevant without TIME. Falling to $1,000 before its TIME warns of lower lows. Likewise, failure to reach a target on the upside by a specific TIME also fails to complete a forecast. PRICE is secondary to TIME, and both objectives must be met. TIME is always the primary objective – not PRICE.
The computer wrote this intro piece on AOL. This is not the entire report that Socrates will provide. There is a lot more including trading with its historical hypothetical trading results back to inception of each instrument.
My analysis for AOL showed a major reaction rally last year, which resulted in a three-year Reaction High forming at 532.8 up from the major low established back in 2011. In order for this rally to continue beyond 2014, a higher year-end closing above 461.7 is required. In order for AOL to turn bullish, we need a rally to extend beyond last year with new highs in 2015 or a higher year-end closing. If new highs are established, then a further rally into 2018 becomes possible. Holding above 514 on a monthly closing basis keeps AOL in a bullish posture, but a monthly closing beneath that level will signal that a correction is possible. However, should new intraday lows develop beyond this target year, then the final low could take place during 2017. Our extreme projected resistance for this year stands at 1573. A continued rally depends upon holding 323.1 intraday.
There are 61 days until the next ECM target, which is Wed. Sept. 30, 2015. A high forming on this precise target will warn of a correction.
The broader trading range is defined by the Monthly Reversals. The Monthly Bullish Reversal stands at 514, whereas the Monthly Bearish Reversal lies below at 419.
Broadly speaking, a month-end closing BELOW 321.9 is where the critical support lies. This currently resides 35% below the immediate trading level, showing where the major support indeed rests. Only a monthly closing BELOW this level will confirm a long-term bear market is in motion.
Otherwise, this is an important dynamic support underlying this market, and holding this level is a clear line of demarcation in long-term trend.
The more immediate trading range is defined by the Weekly Reversals. The Weekly Bullish Reversal stands at 382 whereas the Weekly Bearish Reversal lies below at 382.
MONTHLY TIMING ANALYSIS
Our primary targets on the Turning Point Model, defined as highs or lows on an intraday or closing basis, are July 2015, Sept. 2015, Jan. 2016, and Apr. 2016
Our most critical model, the Directional Change Model targets are Jul. 2015, Aug. 2015 and Feb. 2016. This model often picks the high or low, and can find a breakout to a new higher trading zone, or a breakdown to a new lower trading level.
Looking at the volatility models suggest we should see a rise in price movement during are Aug. 2015, Sept. 2015, Dec. 2015, Jan. 2016 and May. 2016
However, our Panic Cycle targets may see an outside reversal or a sharp move in one direction in June 2015 and Dec. 2015.