As all of us are waiting for the stock markets to bottom out and start moving up to create real wealth for the economy and the people, here is one interesting insight to Predict the bottoming of this market on beforehand so as to get the full benefit of the following upside.
As we can see from the above chart every time the markets have fallen more than 30% from its peak it has bottomed out with a signal in Long Term KST with both the Green line(Long Term KST) and the Red line ( 9day moving avg of KST) falling below that Oversold Zone Line which is acting as a support for the indicator and in turn for markets. In the Chart you can see the 2001 fall which is the 2nd Wave of Cycle degree bull market as per Elliott Wave theory has ended with Long Term KST and its 9 day moving avg falling below that support line. Also Same phenomenon is repeated in 2004 fall, 2006 fall and 2008 fall without fail. This Phenomenon can help us at least in predicting the Near bottom levels of the markets from where it can start picking up with conviction.
So we can conclude from this discovery with a reasonable degree of confidence that markets have not yet bottomed out so as to jump into it for making investments with conviction. All retail people can wait till this phenomenon unfolds and then make their decision to enter the markets with their hard earned monies. There is no need to panic with a left out feeling and buy in the markets every time it goes up in a bear market rally.
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