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David Harris is an independent stock market investor and trader with an interest in modeling price movements in stock markets. In particular, David has spent the last ten years developing mathematical models to identify market tops and market bottoms and more recently a model that identifies... More
  • Bubble Trouble In Argentina : Part 3 0 comments
    Aug 24, 2014 11:37 PM

    SUMMARY

    • The Stock Market index (MERV) in Argentina recorded an all-time closing high during the last week, August 19th-22nd.
    • Upward momentum on both the daily chart and weekly chart may be sufficient to carry the index higher into September and then into October.
    • If the US stock market begins to sell-off in October or early November, it is anticipated that MERV will follow and the bubble will burst.
    • Price projection calculations predict that the peak price for MERV could be in the range 9,200 to 9,650.

    PRICE MOMENTUM

    The Stock Market index (MERV) in Argentina continued upwards to record an all-time closing high on Friday August 22. Momentum on the daily chart and the weekly chart is sufficiently strong to determine that the future price movement for MERV will continue upwards through September and into October.

    However, analysis reported separately from here anticipates that the US markets could form a top in either the 7 week window from early October to mid-November, or the 4 week window covering the last two weeks of December and the first two weeks of January 2015. In this case it is likely that the MERV index will top out at around the same time as the US markets and head lower into 2015.

    PRICE PROJECTION

    Various techniques have been developed to calculate likely price projection levels into the future. These methods have been applied to the MERV index in Argentina.

    On the daily chart the index is likely to reach a level in the range 9,200 to 9,650. On the weekly chart the index is likely to reach a level in the range 9,400 to 9,480. Combining these two approaches suggests a move upwards of at least a further 3% to 5% above the all-time closing high of 9,171.12 recorded on Friday August 22.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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