Analog Update: Sep 3, 2019

All in all, it’s been a pretty good first month for our analog.  Rallies have generally fallen short of projections, but declines have more than compensated.

The initial drop was faster and farther than expected, which was somewhat unnerving and threatened to wreak havoc with the timeline. But, we’re back on track thanks to last Friday’s stunning (just-in-time) 87-pt plunge.  Overnight gaps have been quite common, making the analog that much more beneficial.  Being able to anticipate turning points in advance presents excellent trading opportunities — as evidenced by this morning’s nice gap lower after Friday’s feeble attempt at higher highs.

It’s worth reiterating that we’re very early in what should be a 9-month process. If it’s anything like the 2011 analog, the correlation will strengthen over time.

We’ve had one 7% move and five 4% moves in the first month. Though it has seemed volatile enough, volatility will continue to increase.  Over the next month, we should see three swings of over 7% and one of about 23% (in addition to the garden variety 5% swings.)

Buckle up!

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