Why S&P 500 will be much higher in 5 years?

Duarte

Well-known member
283 3
I'll try to explain why the S&P 500 will be much higher in 5 years.
(It's a guess, not a certainty.)

Chart 1 - S & P500 index monthly candlestick chart between March 1964 and January 2013.

My guess about what is happening is that the S & P 500 since 2000 is following the path between 1968 and 1983.
This suggests that the S&P 500 may rise in the long term.

IhynT.png



Chart 2 - The following chart shows the Price ROC indicator between March 1964 and January 2013.

cLLI2.png


The triple bottom pattern that the indicator did in 1994 was repeated between 2011 and 2012.
After the triple bottom pattern in 1994, the S&P 500 rose during 5 years.
This also suggests that the S&P 500 may rise in the long term.
 
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Duarte

Well-known member
283 3
After a long term analysis made, I will adopt a passive strategy of buy and hold.
For this strategy, I will now use 10 000 dollars and, maybe in one or two years' time,
I will use more 10 000 dollars.

I'll do this for each of the following risk profiles /ETFs:

Higher Risk / UPRO
Medium-higher Risk /SSO
Medium Risk / SPY
 

Duarte

Well-known member
283 3
After a long term analysis made, I will adopt a passive strategy of buy and hold.
For this strategy, I will now use 10 000 dollars and, maybe in one or two years' time,
I will use more 10 000 dollars.

I'll do this for each of the following risk profiles /ETFs:

Higher Risk / UPRO
Medium-higher Risk /SSO
Medium Risk / SPY

About the risk:

The risk varies according to the leverage of the ETF used.

SPY is not leveraged. SPY is designed to have the same gain or loss as the S&P 500.
SSO is 2x leveraged. SSO is designed to have twice the gain or loss as the S&P 500 index.
UPRO is 3x leveraged. UPRO is designed to have thrice the gain or loss as the S&P 500 index
 
Last edited:

WR1

Active member
206 9
not according to the predication's below - 10yrs then maybe?
(pic found on this site the other day)

punters must think the market loves giving them a free ride, and in jumps joe public and yet another (man / market made) crisis appears
It all looks like a classic bull trap in play

the falls in the chart below seem to point towards starting around March, right around the time of US debt ceiling negotiations (and likely next US downgrade)

Next15Yrs DJIA.jpg

although i have no bias - long / short, i don't mind - as long as not sideways
 

wino59

Active member
126 12
I'll try to explain why the S&P 500 will be much higher in 5 years.
(It's a guess, not a certainty.)

Chart 1 - S & P500 index monthly candlestick chart between March 1964 and January 2013.

My guess about what is happening is that the S & P 500 since 2000 is following the path between 1968 and 1983.
This suggests that the S&P 500 may rise in the long term.

IhynT.png



Chart 2 - The following chart shows the Price ROC indicator between March 1964 and January 2013.

cLLI2.png


The triple bottom pattern that the indicator did in 1994 was repeated between 2011 and 2012.
After the triple bottom pattern in 1994, the S&P 500 rose during 5 years.
This also suggests that the S&P 500 may rise in the long term.

Here is just my 2 cents... I think a major decline is coming. I will not get into all the reasons, but I will mention a few. I would not go long, for the long term until the S&P breaks 1576 and has 2 closes above it. In the short term it think we get close to it, then fail.

Remember this pattern you are looking at long term is not complete, you mentioned a triple bottom, but if you look...if we hit 1500 area that will be a triple top, and a major decline could be in store... I am predicted a decline down to the 500 level, then I will go long :) Unless we break 1576.

Since 1982 we have the credit bubble has been fueling the market, most households can't borrow any more nor do they want to. Baby Boomers are going to be retiring at the rate of 10,000 per day, and will start to take money out of the market and put into more fixed income securities, which they already have started doing by the way. We have been going sideways since 2000.

Just be cautious is all I am saying, I would not go long until I got confirmation above 1576. 2 things will happen with this third attempt at that resistance level, it will break through or hold.... if it breaks through go long, if it holds as resistance and it starts to reverse, go short.
 
M

member275544

0 0
My advise is trade what you see, not what you think.
We have all thought that a correction is coming, and yet the market as been bullish since 2009 with a few corrections along the way.
But you think, lets stay away from the long side for more than 3 years because of a correction that you "think" is coming. But you will then be long after 1576?:LOL:
 

wino59

Active member
126 12
My advise is trade what you see, not what you think.
We have all thought that a correction is coming, and yet the market as been bullish since 2009 with a few corrections along the way.
But you think, lets stay away from the long side for more than 3 years because of a correction that you "think" is coming. But you will then be long after 1576?:LOL:

I said I think short term we will get close to the 1576, and fall from there. So short term I would go long... If we get to the point were we break 1500, I would look to exit, and see what happens based on what the chart was telling me, and if it breaks that 1576 level then I would go long again yes.... But if not and it holds then I would look for an opportunity to go short.

Do you think we are just going to blow right through that resistance level without a minor pull back at the very least?
 
M

member275544

0 0
I said I think short term we will get close to the 1576, and fall from there. So short term I would go long... If we get to the point were we break 1500, I would look to exit, and see what happens based on what the chart was telling me, and if it breaks that 1576 level then I would go long again yes.... But if not and it holds then I would look for an opportunity to go short.

Do you think we are just going to blow right through that resistance level without a minor pull back at the very least?

then I clearly didnt understand your statement. Only by saying you wouldnt go long in the long term is the confusing part. Reaching 1576 could be on Monday, how do you know whats long term? Likewise it might never reach it..again how do you know. It just seems a rather arbitrary conclusion or statement to make.
 

Pat494

Legendary member
14,617 1,579
not according to the predication's below - 10yrs then maybe?
(pic found on this site the other day)

punters must think the market loves giving them a free ride, and in jumps joe public and yet another (man / market made) crisis appears
It all looks like a classic bull trap in play

the falls in the chart below seem to point towards starting around March, right around the time of US debt ceiling negotiations (and likely next US downgrade)

View attachment 153114

If the USA had played out the conditions traditionally between 1990 - 2010 then it would be a much less rosy picture. They have saved a number of major companies from bankruptcy/liquidation like GM etc.
In hindsight it might have been better that they had not. Although GM is up and doing quite well again the question remains for how long. The politicians just can't get to grips with the new conditions brought about by new players.

There are tough times ahead imho and the politicians in the present system are probably not up to the job.
 

Vicorka

Active member
246 7
After a long term analysis made, I will adopt a passive strategy of buy and hold.
For this strategy, I will now use 10 000 dollars and, maybe in one or two years' time,
I will use more 10 000 dollars.

You cannot make 5-year prediction solely on technical analysis. Anything could happened within 5-year.
 

Atilla

Legendary member
19,858 3,112
Here is just my 2 cents... I think a major decline is coming. I will not get into all the reasons, but I will mention a few. I would not go long, for the long term until the S&P breaks 1576 and has 2 closes above it. In the short term it think we get close to it, then fail.

Remember this pattern you are looking at long term is not complete, you mentioned a triple bottom, but if you look...if we hit 1500 area that will be a triple top, and a major decline could be in store... I am predicted a decline down to the 500 level, then I will go long :) Unless we break 1576.

Since 1982 we have the credit bubble has been fueling the market, most households can't borrow any more nor do they want to. Baby Boomers are going to be retiring at the rate of 10,000 per day, and will start to take money out of the market and put into more fixed income securities, which they already have started doing by the way. We have been going sideways since 2000.

Just be cautious is all I am saying, I would not go long until I got confirmation above 1576. 2 things will happen with this third attempt at that resistance level, it will break through or hold.... if it breaks through go long, if it holds as resistance and it starts to reverse, go short.


Be interesting to find out what the indeces would be if one were to value it in gold.

Most of that rise is not real value but inflation and increased circulation of dollars.

I wouldn't be surprised if the indeces grew by 50% in the next 5-10 years. 20000 doesn't look extra-terrestrial to me but quite down to earth to be honest... :whistle:
 

Pat494

Legendary member
14,617 1,579
Be interesting to find out what the indeces would be if one were to value it in gold.

Most of that rise is not real value but inflation and increased circulation of dollars.

I wouldn't be surprised if the indeces grew by 50% in the next 5-10 years. 20000 doesn't look extra-terrestrial to me but quite down to earth to be honest... :whistle:

good point about the gold - can't get enough meself

I am guessing your forecast of 20000 is for the Dow ? not the S&P ?
 

new_trader

Legendary member
6,665 1,489
Be interesting to find out what the indeces would be if one were to value it in gold.

Most of that rise is not real value but inflation and increased circulation of dollars.

It is simple arithmetic. I wrote about it back on June 4, 2011, 9:22am. You should have been paying attention.:cheesy:

The S&P500 is worth precisely 0.878 Ounces of gold on 23-1-2013 @13:42 :smart:

I agree and that is why I think there hasn’t been much public participation in the stock market since the global financial crisis began. In regard to your view about the dollar and deflation, I think gold is replacing the dollar as the ‘flight to quality’ asset. The 5 day change for the S&P500 is (-2.2%), the dollar index is (-1.56%) and gold is +1.2%. As for the US raising interest rates, it will only make a difference if real interest rates are positive and is that likely to happen? The USA looks like it might lapse into another recession and has the FED ever tightened when the economy is that weak?

As far as deflation is concerned, when priced in real money (i.e. gold) there has already been deflation. In March 2009 when the stock market reached its lowest point the S&P500 was worth around 0.72 ounces of gold and today the S&P500 is worth about 0.84 ounces of gold, so the S&P500 hasn’t gained much in the last few years, 10 years ago the S&P500 was worth around 4.5 ounces of gold! If you compare the gold to S&P500 ratio from 1950 up until 1971 when the USA was on a gold standard you will notice that whenever the S&P500 costs less than an ounce of gold it is ‘cheap’ in relative terms. It is up to you to determine where you believe those ratios will meet.

Speculating is great fun!
 
 
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