Seeking Alpha

JG Savoldi's  Instablog

JG Savoldi
Send Message
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
My company:
The BAM Report and BAM
My blog:
View JG Savoldi's Instablogs on:
  • The Death of Efficient Market Hypothesis and Random Walk Hypothesis

    The 2008-2009 trading markets provided multiple examples of just how wrong-headed the advocates of EMH and RWH really are.

    After all, these efficient market guys built some of the quant models that blew up the world and saddled taxpayers with debt after we bailed them out.

    Please don't take this wrong--I'm not trying to come across as arrogant--but the idea that markets are random is absurd. A three year old child is capable of drawing a trendline and those trendlines existed long before graphs were available to the public and long before computer trading came into being.

    How is it possible that random price movement would create a trend channel and how could it create those trend channel on each and every fractal timeframe?

    The BAM Model was created by detailed study of price movement related to human emotion (behavioral analysis) and it required me twenty years to to develop this model.

    When markets are volatile and emotion is running high, as measured by the $VIX index, the BAM intra-day SPX model has at times predicted every move that the market would make during the trading session. For example we'll email clients with this:

    -strength into 9:15
    -weakness into 10:45
    -strength into 11:30
    -weakness into the close.

    If markets are random, how would that be possible?

    We're so confident in our model that we've committed to a Twitter "Full Access Campaign" where we're allowing the entire world to follow the predictions we send to our large hedge fund clients each day and we're going to do that each day until October 11th.

    Let's see how it goes and, if after watching our real-time messages, the doubters still believe in this EMH, RWH nonsense, I'll be shocked.

    I'll even tell them how I developed the model because I think they're so stuck in their views that they'll never take the time to figure this stuff out--

    100 years of monthly bar data would be considered by some as a decent data set to study but since each month equals one bar of data, 100 years equals only 1200 bars of data. If, on the other hand, you move down the fractal ladder and study just
    20 hours of 1 minute bar data that would also equal 1200 bars.

    Using this method of studying fractal movement--in essence an unlimited number of miniature bull and bear markets--it was possible for me to determine unequivocally, that what I thought I had discovered in the longer time frame studies of monthly, weekly, and daily charts was indeed showing up in each and every fractal level I studied.

    Very similar to fractals in Elliott Wave Theory but i built this from the ground up.

    I welcome you all to follow us free on Twitter until October 11th.

    Our model is unequivocal in its message here. The stock markets of the world are about to crash and our model has identified both price targets and calendar dates for the events.

    By the way. When crude oil was trading at 147, we told our clients that the BAM model was predicting a crash in crude oil over the next 12-18 months taking the price down to 36 dollars per barrel. It only took 8 months to reach our target and, once again, these RWH guys said it was "totally unpredictable." What are the odds of that?

    Here are a few articles that came out after out September 21 call for a "50% stock market crash."  We have a target of $SPX 529 over the next 2-5 months.

    Sep 26 2:11 PM | Link | 1 Comment
  • What ETF Gambling, $VIX Complacency, and Risk Appetite Tell Us About Investor "Resiliency"
    These juiced ETF's are excellent trading vehicles but there's no question they're very, very dangerous.

    We recommended the $FAZ to our Twitter followers on September 23rd when it was trading at about 19.57 but we also tell followers and subscribers that these are positions we're involved with and that if they should want to invest in our "model portfolio" to use no more than 2-12% of their invest-able dollars.

    For us, a more interesting take-away on the ETF debate (we have a model based on behavioral analysis theory) is the way in which the leveraged ETF's are feeding the publics appetite to gamble.

    History teaches us that we humans tend to go through periods where we love to speculate, followed by periods where we hate to speculate.

    Unfortunately, markets are very large now and that means that when risk appetite plunges (after a big feast) everyone runs for the restroom at the exact same time. (sort of like 2008)

    Back in 2005-2006, we were able to predict in detail what would occur during the crash of 2008-2009, (weekly report archives on the blog) because the BAM Model predicts when market participants will be resilient to pain (losses) and when they will not be resilient to pain.

    Ironically, when people are NOT resilient to pain, they close incorrect positions out very quickly and the markets tend to trade in a more normal, more stable manner.

    It is when resiliency is high that investors will allow a position to "get away from them" and it's that dynamic that causes large price moves--either bulls riding losing positions down or bears riding losing positions up--that sets up the compression that allows the market's inevitable 'capitulation."

    There is never a capitulation set up in markets with low resiliency and there is always capitulation is markets with high resiliency.
    Our model tracks market resiliency--all of the markets we're tracking --on 7 "fractal" time period ranging from monthly, weekly, daily, hourly, 5 min, 1 min, and 25 tick.)

    Today's market, interestingly--and for the first time in the history of my market data--is registering resiliency at an all-time high for both bulls and bears. This is a dynamic most often associated with expanding patterns whereby price makes higher highs AND lower lows during a trading period where both bears AND bulls have a very high level of conviction that they are "correct" in holding positions (stubborn)

    Today's macro environment is obviously a disaster to anyone wishing to use common sense and for that reason the bears think they're correct but, because government intervention has provided a perpetual "backstop," bulls feel correct in anticipating an eventual recovery and they're also probably playing the odds w/ respect to the old adage--"never fight the FED"

    Unfortunately, that dynamic (complacency created by government interventions) has, along with unprecedented fast-money in hedge funds, placed us in a position where our model says we're going to witness the largest crash in the history of markets as we trade forward.

    We all understand what happened in Japan and it seems odd that we're repeating many of the exact same mistakes they made. I'll leave the fundamentals to people specializing in that field and we'll stick to our behavioral analysis work.

    Our model is predicting a massive crash and we have a target of SPX 529 over the coming 2-5 months.

    If you are interested in following our work in real-time each day on twitter you can join us at

    Here's our press release from 9-21 w/ our forecast of a 50% crash in the stock market as well as our crash call in crude oil.

    Time for us to watch some football!

    Sep 26 12:32 PM | Link | Comment!
  • Crude Oil Poised to Crash According to BAM Model

    Back in the summer of 2008—when crude oil was moving into its 147 dollar high and many analysts were calling for 200 or even 300 dollar per barrel crude oil prices—the BAM Crude Oil model was calling an EPIC TOP and warning clients of “an immediate crash to the 87 dollar level into the Fall of 2008 followed by a continued plunge to the 36 dollar level over the coming 12-18 months.” 

    At the time it was a very controversial call and I’ll never forget how hard clients were pounding on us to provide a “fundamental reason” for such a devastating decline.

    Unfortunately, since we use a proprietary model, the “reason” we recommend buying or selling a market is strictly based on the model and NOT the apparent identifiable fundamentals, but in the case of crude oil we were willing to put forth a few ideas.   

    • Our view of the real estate market was extremely bearish based on the fact that it was the most highly leveraged market in the world both in terms of individuals’ loans as well as the derivatives tied to those loans. 
    • Our S&P 500 model was predicting an “unmitigated disaster” in which the SPX was forecasted to plunge all the way back down to 1998 price levels and, assuming that forecast was correct, we assumed the economies of the world would be in free-fall and up to their eyeballs in crude oil supply.
    • We were seeing something that appeared to be either outright manipulation or at least speculation on an unprecedented scale.  This assertion was based on the fact that our intraday crude oil model was displaying bizarre characteristics unrelated to the normal human emotion typically displayed in our work as well as the fact that our intraday model was more extended in our “topping count” than at any other point in history.    

    Here They Go Again

    Today we’re seeing the same type of puzzling action in our intraday crude oil model and, as a result, we’re doing exactly what we did during the summer of 2008—recommending an aggressive position in the DUG as a way to profit from the expected coming crash in crude oil. 

    Not surprisingly, clients are again inquiring about a “fundamental reason” why crude oil would decline from current levels so, once again,  we’re going to state a few facts that might support the model’s prediction for a plunge in crude oil prices.

    • Our BAM “crash alert” is flashing a sell signal with a series of mini-crash windows the first of which is into September 2/3
    • We think the potential economic repercussions resulting from the spread of swine flu are being severely underestimated by the “don’t worry be happy” crowd
    • We’re seeing an extension in our intraday crude oil topping count that rivals the pre-wipeout extension of 2008
    • Our XOI model triggered a capitulation sell signal on 8-25-2009 and is calling for an immediate mini-crash leg or full-blown crash leg into September  
    • We believe a mechanical unwinding of the short Nat Gas/Long Crude Oil trade is at hand

    In conclusion, we would suggest searching for your own compelling “fundamental reasons” that crude oil and crude oil stocks might be poised to tumble.  You know how we’re positioned. 


    Tags: DUG, Crude Oil, Crash
    Aug 26 12:14 PM | Link | 1 Comment
Full index of posts »
Latest Followers


  • We sold short GMCR yesterday at 74 in our real-time Twitter Full Access Campaign ( target is 14.78 (BAM magnet)
    Oct 1, 2009
  • Probably our most controversial call right now is our downside crash target for $JPM. 17.70 is the target based on our BAM magnets
    Sep 27, 2009
  • We're long $FXP $FAZ $SRS $DUG because we're expecting a stock market crash
    Sep 26, 2009
More »
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.