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This is normally a post I would have liked to have made a couple of months ago as we rounded out the half year to 30 June.
I've made it a standard habit of mine over the years to review my annual Road Map forecasts at the end of every quarter. It allows me with the opportunity to assess whether the stock market is tracking according to plan, or whether my Road Map calculations need to be reset.
This year has been a little bit different. If I am being completely open, I haven't really been paying attention to the stock market this year - especially so after I sold out almost my entire equities portfolio back in June (the 15th of June to be exact).
That time frame was basically the date that my Road Map was suggesting would be the beginning of a meaningful sell off in equity markets across the globe. After we had successfully forecast a LOW in March, we received the "strong rally into mid-April" that was also forecast by our Road Map.
The chart below with the pink line is actually my Road Map forecast made at the beginning of the year. I have however added the "Forecast Top 14-15 Aug" box (which was not in my original report) to demonstrate when I thought the next major timing point would occur.
Those of you with my Excel Spreadsheet Calculations will be able to see this exact date being calculated in the spreadsheet provided.
Now, I will be the first to admit that the continued strength in global equity markets post May and June of this year has caught me by surprise. I certainly wasn't expecting this continued strength running into August (see the second chart below - the black line represents what the Dow Jones has actually done so far during the course of the year).
Notwithstanding that the trend between my Road Map (pink line) and the Dow Jones (black line) has diverged since June/July, the date of 14-15 August remains key. So far, the actual high on the Dow Jones remains set at 16 August. This becomes a very key level now for the US equity market.
If this August top can hold, then I still expect the remaining key timing points in my Road Map to play out.
Whilst I'm not going to repeat what those are on this post, there are two more "blue boxes" in my Road Map forecast that I think we need to pay attention to. Certainly, I am looking for the opportunity to switch my cash back into the equities market when I think the next major low in the market comes in.
For now, I am staying the course.
Until next time...