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JG Savoldi
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J.G. Savoldi is a graduate of Auburn University in Alabama where he majored in Criminal Justice Law. After graduation, Savoldi studied stock market history, Elliott Wave Theory, and everything he could absorb from conversations with market veterans--like fellow Alabama native Jimmy Rogers--and... More
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  • "Stretching the Tape" 23 comments
    Oct 7, 2009 3:19 AM
    First of all I want to reiterate the BAM Model's prediction calling for a stock market crash.  I also want to reiterate it's prediction calling for a crash in crude oil taking that mkt back to/through 36 dollars per barrel into year-end.

    According to our model, we should see sharp downside moves in both of those mkts into Friday (October 9th) and, yes, we're sticking with our SPX target of 944.

    The BAM Model--as far as this bearish forecast is concerned is locked in place and there's nothing that will change the forecast.  Could it be temporarily wrong?  Sure.  But based on everything I'm seeing, I'm confident we'll be crashing very soon. 

    So what's with Monday and Tuesday's big rally?  (yes we've heard that a lot)

    Well...the bounce of the last two session was a necessary element if we're going to see a crash, in fact, all crashes experience a period of "stretching the tape" before the crash accelerates to the downside. 

    This stretching of the tape is a result of bulls and bears fighting it out and it's what creates the "resiliency" to pain which is what allows people to hang on to losing positions way too long which in turn forces the inevitable "capitulation" that comes at the bottom.

    By the way, this dynamic happens fairly frequently if you study fractal-level intraday charts.

    So could the market make another higher high?  Sure it could.  But I seriously doubt it will and if it were to occur, we'd be even more aggressive in buying November PUTS on the Nasdaq and Russell 2000 Indexes.  Is that reckless.  No, not according to our model.  According to our model, this is the time we must step up and follow its instructions.

    The "Set-up"

    This market 'set-up' has taken months and years to fall in place--as do all market crashes or melt-ups according to our work--and although the exact turning point can be tough to identify, I've never seen a single set up like this fail during the 90 years of stock market data I've studied.

    But what about all of this talk about "resiliency?"

    The stubbornness--many have been calling it "resiliency"--is exactly what is necessary to create a crash.  Think about it.  In order for a market to crash, you must have the majority on the wrong side of the trade. 

    By its very nature, a crash requires a boatful of investors on the "wrong side"--not simply a handful.

    One thing is certain.  We'll all know the answer to the October crash question soon enough.



     

     
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Comments (23)
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  • Alberto Susterman
    , contributor
    Comments (4) | Send Message
     
    JG
    After your post US$ continue the downtrend and gold continue uptrend
    Whith out any strong gov intervention how you think things can change?
    Where is the triger for the US$ lunch?

     

    Regards
    Alberto
    7 Oct 2009, 04:37 AM Reply Like
  • Jason Tillberg
    , contributor
    Comments (1236) | Send Message
     
    Boldest call I've even seen. Is such a scenario possible? In my opinion, yes. I wish you luck.
    7 Oct 2009, 01:10 PM Reply Like
  • Bobby_Trader_CR1
    , contributor
    Comments (3) | Send Message
     
    BAM,

     

    What types of things does the model look at to make a determination on something like this - that the market is about to crash ?
    7 Oct 2009, 01:21 PM Reply Like
  • YUU WU
    , contributor
    Comments (6) | Send Message
     
    Dont you think that market is being manipulated by FED, Goldman Sachs and other banks having QUANT computers and goverment support to inflate economy, dump the dollar.? See the following video of Rep. Alan Grayson: "Has the Federal Reserve Ever Tried to Manipulate the Stock Market?"
    www.youtube.com/watch?...
    Its very interesting . Some of the famous guys as R, Prechter say that manipulation for more than 2- 3 days is not possible. What do you think about it.
    Also LQD is not dropping significantly which spells good for stocks in the near term. Regards.
    7 Oct 2009, 01:28 PM Reply Like
  • Charlie J
    , contributor
    Comments (85) | Send Message
     
    JGS following your Twitter updates with great interest. As mentioned above, a very 'bold' prediction. Based on all the info I see on the economy, I also expect, as do so many others, that there should be a downturn in the stock market.

     

    But Yuu Wuu mentions the 800-pound gorilla in the room that can't be ignored. I get a market-timing newsletter that has also been predicting a major downturn, starting soon. When I emailed one of the principals and said, what about the liquidity from the government / Fed, he said that basically he goes by sentiment, that's what really matters. Does your model factor in all this liquidity that has been injected? Can it deal with an announcement from the Fed, say tomorrow, that it will interject more liquidity, immediately?

     

    I would also mention that if this week passes without the start of a plunge, my suggestion is that you go a little longer with your campaign, at least one more week. If it happened to be that you were just one week early, no one would be less impressed with your call (and I would line up to get your newsletter or whatever it is you're doing).
    7 Oct 2009, 05:39 PM Reply Like
  • BOHICA
    , contributor
    Comments (57) | Send Message
     
    5 days ago, BAM predicted a big fall this past Monday in the stock market. Instead, the market rose. Tried to place this observation on the BAM site, but it was deleted. What gives?
    8 Oct 2009, 01:05 PM Reply Like
  • BOHICA
    , contributor
    Comments (57) | Send Message
     
    "Investors! How accurate is BAM? Take a look at what we were predicting back on August 11th and August 14th of 2008."

     

    Yes, but BAM does not appear to accurately predict everything. Take a look at what BAM was predicting 3 days ago: "$SPX.X-- No change in model. 944 later this week..."
    8 Oct 2009, 02:02 PM Reply Like
  • JG Savoldi
    , contributor
    Comments (45) | Send Message
     
    Author’s reply » I was asked the same question by some very successful currency traders back in 2007-2008 when our model forecast a huge move coming in the YEN. They all said the fundamentals were pathetic etc. yet the YEN rocketed and the Carry Trade unwound and the world crashed.

     

    Model very similar looking here and I do think the USD rallies sharply and disrupts the 2009 version of the carry trade. Once that starts it simply feeds off itself without any needed fundamental change i.e. US economy improving etc.

     

    On Oct 07 04:37 AM Alberto Susterman wrote:

     

    > JG
    > After your post US$ continue the downtrend and gold continue uptrend
    >
    > Whith out any strong gov intervention how you think things can change?
    >
    > Where is the triger for the US$ lunch?
    >
    > Regards
    > Alberto
    9 Oct 2009, 01:35 AM Reply Like
  • JG Savoldi
    , contributor
    Comments (45) | Send Message
     
    Author’s reply » Nothing was deleted from BAM site as you claim here. BAM site is not set up for comments. We never claim the mkt always follows the BAM Model, we simply claim that when the market does NOT follow the model, the market will reverse course and fall back into line with the model's predicted direction and price targets.

     

    On Oct 08 01:05 PM BOHICA wrote:

     

    > 5 days ago, BAM predicted a big fall this past Monday in the stock
    > market. Instead, the market rose. Tried to place this observation
    > on the BAM site, but it was deleted. What gives?
    9 Oct 2009, 01:37 AM Reply Like
  • JG Savoldi
    , contributor
    Comments (45) | Send Message
     
    Author’s reply » THX

     

    Not trying to be "bold" but when I agreed to expand the business offering from institutional/hedge funds, to individuals I promised to continue writing and forecasting exactly as I have since 2006. Right or wrong, I pass along model's predictions no matter how outrageous.

     

    On Oct 07 01:10 PM Jason Tillberg wrote:

     

    > Boldest call I've even seen. Is such a scenario possible? In my
    > opinion, yes. I wish you luck.
    9 Oct 2009, 01:41 AM Reply Like
  • JG Savoldi
    , contributor
    Comments (45) | Send Message
     
    Author’s reply » It is all proprietary as far as velocity predictions based on price action but a few components will be offer as videos at some point during the coming 12 months. Crashes and melt-ups are predicted based on the exact same data set up (flipped). Bottom-line is that everything we do is derived from past human behavior as displayed in simple price actions.

     

    On Oct 07 01:21 PM User 472926 wrote:

     

    > BAM,
    >
    > What types of things does the model look at to make a determination
    > on something like this - that the market is about to crash ?
    9 Oct 2009, 01:44 AM Reply Like
  • JG Savoldi
    , contributor
    Comments (45) | Send Message
     
    Author’s reply » Great questions. First off, yes the gov can change the route but I've never seen evidence that they can stop the mkt from eventually reaching its final destination. I think they understand this but they want to avoid the disruptions that come from the more instantaneous 20% plunges. 20% over 3-4 weeks they can handle but 20% in 2 sessions--not so much. This is especially true now because hedge funds are too leveraged and most appear to be in very similar bets.

     

    Last year for instance you'll see my reports warning of multiple crashes and as we started to crash the Fed or Treasury/gov would step in and stop what would have been a full-blown 20% plus 2 session event according to my work. As to your question below. Who knows, maybe IF the gov. injected more liquidity that action would be viewed as bad medicine and that might turn into the actual catalyst for a crash. I focus strictly on the model and the rest seems to work out.

     

    "Does your model factor in all this liquidity that has been injected? Can it deal with an announcement from the Fed, say tomorrow, that it will interject more liquidity, immediately?"

     

    On Oct 07 05:39 PM Charlie J wrote:

     

    > JGS following your Twitter updates with great interest. As mentioned
    > above, a very 'bold' prediction. Based on all the info I see on
    > the economy, I also expect, as do so many others, that there should
    > be a downturn in the stock market.
    >
    > But Yuu Wuu mentions the 800-pound gorilla in the room that can't
    > be ignored. I get a market-timing newsletter that has also been
    > predicting a major downturn, starting soon. When I emailed one of
    > the principals and said, what about the liquidity from the government
    > / Fed, he said that basically he goes by sentiment, that's what really
    > matters. Does your model factor in all this liquidity that has been
    > injected? Can it deal with an announcement from the Fed, say tomorrow,
    > that it will interject more liquidity, immediately?
    >
    > I would also mention that if this week passes without the start of
    > a plunge, my suggestion is that you go a little longer with your
    > campaign, at least one more week. If it happened to be that you
    > were just one week early, no one would be less impressed with your
    > call (and I would line up to get your newsletter or whatever it is
    > you're doing).
    9 Oct 2009, 01:55 AM Reply Like
  • JG Savoldi
    , contributor
    Comments (45) | Send Message
     
    Author’s reply » I have no clue about manipulation. What I can say is that I see odd action at key turning points. Much more prevalent is large traders running stocks through support or resistance as a method for creating liquidity into which they distribute shares. They own large blocks of shares and when they are surprised by some new piece of data (that is not yet public) they must create instant liquidity in order to exit shares. Their solution (sometimes) is to create a positive or negative "story" or simply have a skilled trader force liquidity out of the tape.

     

    On Oct 07 01:28 PM YUU WU wrote:

     

    > Dont you think that market is being manipulated by FED, Goldman Sachs
    > and other banks having QUANT computers and goverment support to inflate
    > economy, dump the dollar.? See the following video of Rep. Alan
    > Grayson: "Has the Federal Reserve Ever Tried to Manipulate the Stock
    > Market?"
    > www.youtube.com/watch?...;feature=player_embedded
    >
    > Its very interesting . Some of the famous guys as R, Prechter say
    > that manipulation for more than 2- 3 days is not possible. What do
    > you think about it.
    > Also LQD is not dropping significantly which spells good for stocks
    > in the near term. Regards.
    9 Oct 2009, 02:01 AM Reply Like
  • BOHICA
    , contributor
    Comments (57) | Send Message
     
    On Oct 09 01:37 AM JG Savoldi wrote:
    Nothing was deleted from BAM site as you claim here. BAM site is not set up for comments.

     

    Really? Let me get this straight: The BAM site is not set up for comments, but you have a place set up on your BAM site for comments.
    9 Oct 2009, 11:32 AM Reply Like
  • BOHICA
    , contributor
    Comments (57) | Send Message
     
    BAM Investor wrote: "According to our model, we should see sharp downside moves in both of those mkts into Friday (October 9th) and, yes, we’re sticking with our SPX target of 944."

     

    Okay, this has not happened as prophesied. Now what? Awaiting further instructions.
    9 Oct 2009, 11:48 AM Reply Like
  • BOHICA
    , contributor
    Comments (57) | Send Message
     
    BAM Investor wrote: "Well, it looks like we’re at the moment of truth with respect to the BAM Model’s prediction of an imminent stock market crash. Clients should be well prepared, having been provided ample warning and we’ve also done our best to warn individual investors who have been following us via our blog, website or Twitter campaign."

     

    Thank you for offering predictive BAM model thoughts real-time on Twitter. Just to be clear, few of us consider the current bull-run to be a trajectory with a happy ending. However, the simple fact is the moment of truth has come, and gone, relative to no less than 3 predictions boldly offered this week by BAM:

     

    1) The BAM model, as noted in your Twitter comments, predicted a big fall in the equities market this past Monday (the market rose substantially instead).
    2) The BAM model, also captured in Twitter comments, predicted weakness in the equities markets into this Friday (at week's end, we can look back and see moderate strength, instead).
    3) As quoted previously, the BAM model predicted SPX 944 by Friday (an unequivocally incorrect prediction just like predictions 1 and 2).

     

    One always wonders why prediction models such as BAM are offered for sampling and ultimate sale to the public if they're exceptionally reliable as tools of investment and speculation. This demonstration helps us more clearly understand that mystery. That there is no accountability for these failed prophesies is unfortunately also in keeping with the tradition of retail divination enterprises.
    9 Oct 2009, 02:23 PM Reply Like
  • JG Savoldi
    , contributor
    Comments (45) | Send Message
     
    Author’s reply » While BOHICA creates encyclopedic details of our so far incorrect S&P 500 "crash call" serious investors have made 7x returns on our forecast for a melt-up in the wheat market.

     

    Let's get to the facts here.

     

    Stocks broke sharply after our crash forecast and then SOME indexes made slightly higher highs this week. Bottom-line is that stocks have gone basically nowhere while our LONG wheat and the USDSEK positions have catapulted to the upside.

     

    Our job--and we take it very seriously-- is to make/save money for paying clients and ourselves and we've been doing that.

     

    Let's all check back on the BAM crash call once the month moves forward and lets also see if the SPX is trading at 529 later this year early next as our model is suggesting.

     

    Put the shovel away...it's too early to bury our crash call.

     

    JG Savoldi

     

    13 Oct 2009, 09:51 PM Reply Like
  • jeremiah74
    , contributor
    Comments (272) | Send Message
     
    JG SAvoldi

     

    I've been following you on twitter for the last few days, just before it went 'off the air'. I dont disagree with your conclusions. On the methods I cant comment.

     

    I also think that just because you were wrong on these short term calls doesnt mean your model cant work. I personally would only bury it after following it for a longer time frame. Which I cant anymore because its been discontinued

     

    We are at a turning point in the markets, I believe (may be wrong) in times like these it becomes very difficult to forecast anything because each buyer/seller's motivation start to diverge and what the eventual vector of all the transactions will be is more unpredictable than usual.

     

    I give you the benefit of the doubt, because if you have indeed invested as much energy into your model as you claim, there ought to be some results.

     

    Nevertheless, I would have been more impressed if a higher percentage of your calls had worked recently. You sure caught the wheat move, and its not just a mirror of the usual dollar selling + gold melt up. Wheat moved more. But EURSEK is really pretty much at the lows, maybe 1.5% off the lows. Thos dont make up for the missed call you had on the dollar and equities. But again.. time will tell.
    14 Oct 2009, 03:07 AM Reply Like
  • BOHICA
    , contributor
    Comments (57) | Send Message
     
    "Put the shovel away...it's too early to bury our crash call."

     

    Nobody's got a shovel out. It's just that until last Friday, even your missed calls were later conveyed by you with a lot of self-administered credit, as if even the bad calls were in accordance with some sort of prophecy.

     

    As I said previously, few here expect this to end well. As you probably are aware, that's one reason it keeps going.

     

    The Big One was supposed to happen beginning the week before last. Now you seem to be saying it will maybe happen in this month or maybe by...the end of the year. In an effort to keep this positive, perhaps I might ask what you suppose your model is missing?
    16 Oct 2009, 06:25 PM Reply Like
  • JG Savoldi
    , contributor
    Comments (45) | Send Message
     
    Author’s reply » We're not long EURSEK as you say here. We NEVER called that w/ Twitter or elsewhere. We bought the USDSEK (big difference) very near the actual low and it did very, very well for us.

     

    As for the lack of new calls on Twitter--the Twitter Campaign was a well publicized limited campaign and since we have paying subscribers, it's not fair to extend that campaign. Granted, stocks continued to make very marginal new highs after the 5% sell off following our crash call, but the model's unlikely bull call in wheat near the lows has worked out so well that it dwarfs the other calls that haven't flipped our way yet.

     

    We've been through difficult periods before but we stick with the model and stay the course 100% of the time and, so far, that has proven very profitable with respect to big-picture forecasts.

     

    It's interesting that when markets move against a fundamental call, the person making the ccall based on fundamentals is usually considered early by the heard but when the market moves against a call based on behavioral analysis, many outsiders consider us immediately "wrong."

     

    My view is straight-forward. If we're making money for clients next week and next month based on this series of calls (short stocks, long bonds, long the USD, short crude oil, and long wheat), I'll consider the model's forecast a success.

     

    I do agree however, that our timing has been less than stellar with respect to stocks, but we're guessing that once the crash kicks-off people will understand why we've been so incredibly bearish.

     

    This is going to be an unmitigated disaster for the remainder of 2009 according to our stock model. I guess we'll know soon enough.

     

    On Oct 14 03:07 AM jeremiah74 wrote:

     

    > JG SAvoldi
    >
    > I've been following you on twitter for the last few days, just before
    > it went 'off the air'. I dont disagree with your conclusions. On
    > the methods I cant comment.
    >
    > I also think that just because you were wrong on these short term
    > calls doesnt mean your model cant work. I personally would only bury
    > it after following it for a longer time frame. Which I cant anymore
    > because its been discontinued
    >
    > We are at a turning point in the markets, I believe (may be wrong)
    > in times like these it becomes very difficult to forecast anything
    > because each buyer/seller's motivation start to diverge and what
    > the eventual vector of all the transactions will be is more unpredictable
    > than usual.
    >
    > I give you the benefit of the doubt, because if you have indeed
    > invested as much energy into your model as you claim, there ought
    > to be some results.
    >
    > Nevertheless, I would have been more impressed if a higher percentage
    > of your calls had worked recently. You sure caught the wheat move,
    > and its not just a mirror of the usual dollar selling + gold melt
    > up. Wheat moved more. But EURSEK is really pretty much at the lows,
    > maybe 1.5% off the lows. Thos dont make up for the missed call
    > you had on the dollar and equities. But again.. time will tell.
    19 Oct 2009, 02:44 PM Reply Like
  • jeremiah74
    , contributor
    Comments (272) | Send Message
     
    hi

     

    sorry. my mistake USDSEK. it was a typo. USDSEK's low this year was on Sep 22: 6.80 even if you bought it there its up now 2%. thats far from stellar in the FX world.

     

    i dont question your call, never did. you should continue updating twitter for a bit more. it would help set your track record straight once the downfall starts to happen. i would consider subscribing (i work on a bank's prop desk, and have a small budget for 3rd party research)

     

    lot of models dont work right now. maybe there is indeed some covert intervention in futures to support the mkt.
    20 Oct 2009, 07:43 AM Reply Like
  • Five Plus Investor
    , contributor
    Comments (2483) | Send Message
     
    What do we have in this market but the "short term"? And if one who presents themselves as making "accurate" predictions is wrong for the short term, how does it help anyone in this trader's market?

     

    Mr. Savoldi is off my follower's list. Good thing I didn't go whole hog on his "predictions".

     

    On Oct 14 03:07 AM jeremiah74 wrote:

     

    > JG SAvoldi
    >
    > I've been following you on twitter for the last few days, just before
    > it went 'off the air'. I dont disagree with your conclusions. On
    > the methods I cant comment.
    >
    > I also think that just because you were wrong on these short term
    > calls doesnt mean your model cant work. I personally would only bury
    > it after following it for a longer time frame. Which I cant anymore
    > because its been discontinued
    >
    > We are at a turning point in the markets, I believe (may be wrong)
    > in times like these it becomes very difficult to forecast anything
    > because each buyer/seller's motivation start to diverge and what
    > the eventual vector of all the transactions will be is more unpredictable
    > than usual.
    >
    > I give you the benefit of the doubt, because if you have indeed
    > invested as much energy into your model as you claim, there ought
    > to be some results.
    >
    > Nevertheless, I would have been more impressed if a higher percentage
    > of your calls had worked recently. You sure caught the wheat move,
    > and its not just a mirror of the usual dollar selling + gold melt
    > up. Wheat moved more. But EURSEK is really pretty much at the lows,
    > maybe 1.5% off the lows. Thos dont make up for the missed call
    > you had on the dollar and equities. But again.. time will tell.
    21 Oct 2009, 09:15 AM Reply Like
  • BOHICA
    , contributor
    Comments (57) | Send Message
     
    "This is going to be an unmitigated disaster for the remainder of 2009 according to our stock model. I guess we'll know soon enough."

     

    Okay, haven't heard anything since mid-October. What's going on? The big question is: how soon is it before we admit this "soon enough" disaster is not a credible prediction?
    17 Nov 2009, 10:01 PM Reply Like
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