VLT Projections for DJI

I know you were looking forward for this. As you may remember, I post every year something absurd about the wealth extracted so far in the US markets by using the cummulative discounted total earnings of the equities (=cummulative stock prices in English). This year, I ploted the logistic curve and derived future index values...

I included into the logistic curve a VLT seasonal cyclical pattern which seems to be composed of two overlapping cycles of the same harmonics that scaled up nicely with the derivative of the logistic curve. This is a nontrivial partial differential equation with 10 variables or so that converged to 3 different solutions with slightly different initial conditions, one of them peaked last year, the other two peaks are in 2040s and 2070s. I also solved for only the center line without the VLT seasonality for a sanity check. I favor the 2040s due to the expected peak in the world population, but in the event that the population continues to grow one more generation, I think a later peak will be more likely.

I am only posting here the longest projection I got, the concept is the same for the others with different levels and retracements etc... I think a peak after 2070 does not necessarily mean the end of the civilization, but something severe will obviously happen on the way down, it is happening even during the current one...

For the short term the pattern suggests a low in 2012 about 40-50% lower. This is somewhat also inline with many published economic models. There will be obviously strong bounces in between...


BTW, this month's non-borrowed cash reserves in the commercial banks (released on Thu) is again showing more negative values. This is inline with the trend of the banking indices which are still dragging the entire market down. My focus will be the SPX pivot at 1332 early next week. I expect the central banks to inject tremendous amount of liquidity ahead of the 2nd quarter results, or it will be a banking driven slaughter in the equities. This might should come in the first part of the April in my work. These injections will support the market until the first quarter of 2009 bearing another divergent decline into the 2yr cycle low at the end of May as I posted several times here. I see a complete disaster right now after the first quarter of 2009...

This is a masterpiece. Thank you.

After all the heroics, non-borrowed assets still plummenting. Now a -61 billion. And this at a time when banks were supposed to be massively trying to get their asset ratios back in line. Not a good thing.

If the world stock markets peak in the next cyclical top, the highs will most likely come in the 2030s, not 2040s, this is because the cyclical shape will start to be left translated, rather than right translated as they did in the previous three generational cycles. This is why it is safe to assume that there will be at least one more higher high in the coming decades (the low I am expecting is a higher low, but we will see how it goes)...

Edited by arbman, 30 March 2008 - 12:39 PM.