Increased market volatility since February 2020, will power average monthly gains of 17% and cumulative gains of 500% from trading the long and short ETFs for the US and 12 other countries through October 2022 according to the SCPA algorithm. The markets of the 13 countries began their crashes from their 2020 all-time or multi-year highs on February 20, 2020.
The SCPA (Statistical Crash Probability Analyses) has forecasted 31-month journeys for the markets of the countries to their final October 2022 bottoms which will be 79% below their 2020 highs. The SCPA’s 2020-2022 market gains forecast is based on the findings from the empirical research of the Dow 1929-32 and the NASDAQ 2000-02 market crashes.
From its November 1929 interim bottom to March of 1932 the Dow had 14 rallies producing gains ranging from 6% to 33%. The rallies were followed by 14 corrections from December of 1929 to July of 1932 with gains of 7% to 54%. The rallies produced aggregate gains of 258% and the corrections produced gains of 319% from shorting the market. The cumulative gains for the Dow over the 32 months was 577%.
From April of 2000 to September of 2002 the NASDAQ had 13 rallies producing gains ranging from 12% to 51%. The rallies were followed by 13 corrections from May of 2000 to October of 2002 which produced gains ranging from 15% to 40%. The rallies produced aggregate gains of 302% and the corrections produced gains of 317% from shorting the market. The cumulative gains for the NASDAQ’s rallies and corrections over the 31 months was 619%.
The three-month price charts below are for the Dow from September 24 to December 24, 1929 and for Brazil’s Bovespa index from January 24 to April 24, 2020. The chart patterns for two market crashes 91 years apart sharing the same genealogy are virtually identical.
All of the above charts are a testimonial in support of utilizing empirical market crashes data and statistical probabilities to forecast future crashes and their post-crash events. The 2020 crashes for the markets of 13 countries provide rare 500% cumulative gain opportunities in less than three years from utilizing a long and short ETF trading strategy. Since 1900 there have been only two prior periods, 1929-1932 and 2000-2002 in which such gains were possible. It could be 2040 to 2110 before another opportunity for gains of 500% in less than three years becomes available.
SCPA (Statistical Crash Probability Analyses) is forecasting a 100% probability for the following post-crash of 2020 events:
- New lows for the markets of US and eight other countries which have yet to penetrate their initial 34% March 2020 initial correction lows. The lows will occur between May 6 and May 20, 2020. See April 30, 2020, “Interim relief rally highs for markets has or will soon occur” article.
- 100% probability that a world economic depression has already begun. Forecast based on analysis of empirical GDP data from 1929 to 1934. See “Worldwide 1930s Style Depression Has Begun”, April 27, 2020. See also, “J.P. Morgan economists predict a 40% decline in 2nd quarter GDP”, April 12, 2020.
The table below contains the SCPA’s initial forecasts that were made in March 2020. All four of the precise forecasts were accurate.
The SCPA and another of my algorithms, the Bull & Bear Tracker (BBT) which complement each other are capable to produce aggregate gains of 500% through 2022. The Bull & Bear Tracker which is in the market 24/7 and for 365 days a year monitors the markets for bullish and bearish trend changes. For March of 2020, the BBT’s signals produced a gain of 29.3%. For the first 28 days of April, the BBT’s signals produced cash gains of 15%. See “Bull & Bear Tracker shatters all monthly records for March 2020”.
To maximize the potential profits that can be produced by the SCPA and BBT algorithms requires active management of the signals by a registered investment advisor who has been approved to trade the BBT’s signals. To be referred to a registered investment advisor click below.
My prediction is that the S&P 500’s secular bull market which began in March 2009 ended on February 19, 2020. The ninth secular bear since 1802 began on February 20th.
Read my March 31, 2020, article entitled “Embrace the Bear” to learn about:
- investing strategies that are best utilized during bear markets
- investing in the shares of inverse ETFs which go up when the market goes down
- algorithms including the Bull & Bear Tracker and SCPA which are being utilized by investors
The video of my “Secular Bulls & Bears: Each requires different investing strategies” workshop at the February 2020 Orlando Money Show is highly recommended. The educational video explains secular bulls and bears and includes strategies to protect assets during secular bear markets and recessions, etc.
A strategy to liquidate all mutual fund holdings and stocks above $5 should be deployed immediately. Time is of the essence. To understand why diversification does not work and why penny and low-priced stocks should be held watch MoneyShow workshop video.