Here are the dates of the turns that we expect in equity and bond markets over the next few weeks. Please note that we score equity index turns from grade 1 (strongest) to grade 3 (weakest) but do not grade those in other markets unless they are notably large. All are potentially significant. There are quite a lot of turns in equity indices due in these weeks, which may point to generally choppy conditions.
There was a grade 3 turn due in equities – mostly in the US – last Wednesday, the 23rd October, with a bond turn due at the same time.
Another grade 3, possibly a grade 2 equity index turn is due today, Tuesday the 29th October but this is a bit diffuse, spread over a day either side from Monday until tomorrow the 30th. All the components from Asia were due yesterday, Monday 27th. Bonds are due a turn too, which is also a bit diffuse but slightly more likely to have come on Monday 27th.
Yet another equity index turn is due on Monday 4th November – a large grade 2, spread over US, European and Asian markets. There is a Dow Long Term turn due a day before, on Friday the 1st November that means we should pay particularly close attention either side of that first weekend in November. We apply slightly different methods to the Dow Industrials history looking only for the biggest turns and they are less common.
There is a short lull then until Monday/Wednesday the 18th/20th of November when we expect a turn that is almost all from Europe and Asia and is divided equally between these two days. It would be a grade 2 if all the components came on the same day but we are scoring it a high 3. It may of course come on the 19th.
Bonds are due a turn on Thursday the 21st November.
A big equity index turn is then due on Monday the 25th – perhaps a full grade 1 although there are only 4 components from Europe (6 or more would be better). There may be a bond turn too, but evidence is weak.
Next, small equity turns on the 3rd of December (in Europe) and 4th (in the US) that might together constitute a grade 3 event.
Two bond turns are due the following week on Monday the 9th and Thursday the 12th of December and:
A large grade 2 equity index turn is also due on Thursday the 12th December that spills over a bit into the next day. If there were more components from Asia, this would be a grade 1.
The usual year-end muddle then starts. There are marked seasonal pressures at this time of year, so we place less trust in turns for the next weeks – there is always supposedly a big turn on the first business day of each year but we have learned to treat this with some suspicion because the immediate period into year-end is so often the time of a contrived rally. We will try to make sense of that first week of 2014 nearer the time.