Forecasting the financial markets is like predicting the weather and is a matter of probabilities rather than certainties. However, some cyclical trends can be detected and predicted even if they sometimes come late or early just like the Seasons do from Year to Year.
Unlike dice which do not have memory, most market participants have limited funds to invest or trade which gradually loads the dice against them as they move their funds into the markets making the financial markets a Dynamic Pendulum system rather than a Random Walk like dice.
We can measure how loaded the dice are in both the short, medium and longer term by looking at common sentiment measures and then compare that with the current cyclical position to measure the relevant risk/reward scenario.
Since Price is the most important factor in any investment decision, market participants use a number of gauges like Fibonacci levels, moving averages, trend lines, channels, triangles and other geometric structures to anticipate future price movements. Their collective focus and actions on these structures and levels is what actually gives these methods their predictive value when properly used.
If you wish to see how all of this comes together to forecast what is likely to happen to the financial markets next week, next month, next quarter or even for decades then subscribe to our Weekly Market Update for less than $3 an issue or $150/yr with a 15 day trial.
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