FM Wealth Management News Letter
Unlike what you have been led to believe there is no big secret to
how the markets work. In reality, it is really quite simple.
Unfortunately that does not mean that specific smaller degree moves in
the market will be just as simple.
Markets act the same wherever you look. Whether it is the equities, metals, Forex, crypto-currencies, etc, they all react in the exact same way. Markets simply move from one extreme to another. We need to be able to identify where those extremes can cause a turn.
So therefore in making your determination of turning points, there is no one definitive point at which a market must turn. So really we are dealing in probabilities when we attempt to analyze that which is non-linear in nature, such as the financial markets.
For Clients and Newsletter readers that have followed FM Wealth Management and FM Wealth Management reports for years, would know that this is exactly how we apply our wave analysis.
As an example, we were able to identify major shift changes in the US Dollar Index (DXY) when we called for a multi-year rally in 2011 when DXY was at the 74, with a long-term target to 103.50.
Another example was when we came within $6 of the top in the gold market in 2011. For those who recall, our initial expectation was that gold would see a 40% pullback before gold even struck its high.
At that point we pointed out that if that 40% drop would not hold support, it could open the door for gold to correct all the way back down to the $1,000.
Many analysts and clients disregarded our analysis at the time because everyone was so certain it would easily eclipse the $2,000 region during the parabolic phase it was in at the time we made this call. So, when gold gave us a 40% correction from our top call, we began looking for a resurrection of the bull market.
However when the market made it clear that it was not going to resurrect, we began looking for the price to come down to $1,000-1100 before looking for another bottoming structure.
So we remain flexible, as we do not believe that anything MUST happen within the financial markets.
Markets act the same wherever you look. Whether it is the equities, metals, Forex, crypto-currencies, etc, they all react in the exact same way. Markets simply move from one extreme to another. We need to be able to identify where those extremes can cause a turn.
So therefore in making your determination of turning points, there is no one definitive point at which a market must turn. So really we are dealing in probabilities when we attempt to analyze that which is non-linear in nature, such as the financial markets.
For Clients and Newsletter readers that have followed FM Wealth Management and FM Wealth Management reports for years, would know that this is exactly how we apply our wave analysis.
As an example, we were able to identify major shift changes in the US Dollar Index (DXY) when we called for a multi-year rally in 2011 when DXY was at the 74, with a long-term target to 103.50.
Another example was when we came within $6 of the top in the gold market in 2011. For those who recall, our initial expectation was that gold would see a 40% pullback before gold even struck its high.
At that point we pointed out that if that 40% drop would not hold support, it could open the door for gold to correct all the way back down to the $1,000.
Many analysts and clients disregarded our analysis at the time because everyone was so certain it would easily eclipse the $2,000 region during the parabolic phase it was in at the time we made this call. So, when gold gave us a 40% correction from our top call, we began looking for a resurrection of the bull market.
However when the market made it clear that it was not going to resurrect, we began looking for the price to come down to $1,000-1100 before looking for another bottoming structure.
So we remain flexible, as we do not believe that anything MUST happen within the financial markets.
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