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Elliott Wave Trading

Using Goldman and JP Morgan to Predict Stock Market Turning Points

Stock-Markets / Stock Markets 2012 Dec 21, 2012 - 05:07 AM GMT

By: WavePatternTraders

Stock-Markets

Goldman (GS)

A couple of stocks I like to follow are GS and JPM to forecast pivot turning points in the US stock markets, particularly the SPX.

You can see how JPM and GS appear to be tracking the SPX well and that it’s my belief that if we can track potential Elliott Wave counts in both Goldman and JPM, we can find an edge to the US markets and use that information to forecast major peaks and turns in the US stock markets.


If you overlay SPX, GS and JPM with each other, there is a clear bonding between the 3 markets.

I want to first show an example to the benefits of counting stocks like GS, because they are big stocks that are traded by big institutions, it’s important to watch stocks like this as they act very familiar to the major markets. If those stocks have patterns that suggest a reversal then in my opinion we can use that information to time major turning points in the major indexes.

Back in March this year I was tracking a 5 wave advance for Goldman and it looked completed, which got me on high alert for a potential reversal in the US markets, I have seen it too many times that stocks like Goldman and JP Morgan show completed patterns and then the major markets reverse.

With a 5 wave advance, Elliott Wave suggests once a 5 wave move is completed then a correction is due.

If we overlay GS with the SPX, you can clearly see how knowing what was going on in Goldman gave us a distinct advantage with what was about to happen, or I should say what I thought was going to happen with the US stock markets.

Using Goldman I was actually able to predict that a turning point in the SPX was days away.

The high for Goldman was on 27th March 2012, the high for the SPX was on 2nd April. As Goldman and other stocks like JPM started to reverse and move lower it was only a matter of time before the rest of the market would follow. Clearly you can see how the markets reacted.

Which brings me to the point of the article and by using Goldman and JP Morgan, I think a major turning point is at hand in the US markets and one that could be upsetting the bulls that are too complacent.

If we look at Goldman’s Elliott Wave count, from the June lows there appears to be a 5 wave advance, and currently I suspect its now in the 5th wave, so a top in Goldman should be seen shortly which as  history suggests the SPX will not be far behind if Goldman rolls over.

My best guess at this stage is sometime in January, that Goldman will complete its advance in a 5 wave impulse move. With Goldman so close to the March 2012 highs I suspect this will push towards $135 and end its advance.

It appears to need a few more gyrations to complete its advance from the June 2012 lows. So sometime in January this could be vital clue to use predict a reversal in the US stock markets, and the way GS and JPM appear to be setting up, early in 2013 suggests a turning point for the US markets.

JP Morgan (JPM)

I have been tracking a similar wave count in JP Morgan and that from the June 2012 lows, this as well looks like a 5 wave advance in play and a small dip then a push higher suggests a completion to the advance and another clue that I will be watching to suggest a major turn in the SPX.

With or without a new high in the SPX above the September 2012 highs, (although I have daily Elliott Wave pattern that ideally sees 1480-1500SPX) once the patterns on JPM and GS complete themselves. I am confident they will be signally a strong reversal in US stocks, just like Goldman did back in March 2012.

They say they never ring the bell at the top, but who needs a bell when we have JPM and GS.

Until next time

Have a profitable week ahead.

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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