Purely Technical Conclusions

In the past, Rick’s Picks has shunned year-end predictions because there are far too many variables to handicap accurately. I’ve decided to take a crack at it anyway this year because I was curious to see what conclusions purely technical analysis would yield for some widely followed issues.

I’m no seer, just a chartist, and I’ll say up front that the question of whether the Dow Industrials are trading at 23,000 at the end of 2015, or at 14,000, is probably no better than a coin-toss bet. Also, because the stock market is a house of cards and only distantly connected to economic reality, only a fool would try to predict the timing of The Big One that we all know is coming.

Stocks could collapse at any moment, to be sure, and although I doubt this will occur next year, the odds are hardly remote. If you absolutely need to know when calamity will strike, I recommend checking the year-end predictions of Bob Prechter, Martin Armstrong and Ross Clark, since they are the very best timers in the guru world.

 

Forecasts-fpr-2015-and-beyondRick Ackerman’s stock market picks with the most bullish, most bearish, and “outrageous” target price alternatives

 

Possible Scenarios

Keeping the foregoing in mind, I’ve allowed for both bullish and bearish scenarios in most of the forecasts above. Those designated ‘N/A’ imply outcomes that are unimaginable to me. For instance, the shares of Snipp Interactive, a penny stock that is my number one bullish pick for 2015, seem unlikely to head lower no matter what happens to the economy. The firm provides personal-device-based marketing solutions to a growing list of blue-chip clients, and they are nimble and imaginative enough not only to excel in their niche, but to expand it.

 

SNIPPSPN.V, the Vancouver listed stock of Snipp interactive over the past four years, weekly. The US OTC listed version (symbol: SNIPF) closed the year at a price of $ 0.531. Somewhat overbought in the short term, as the so-called “January effect” in small caps nowadays tends to arrive two to three weeks early – click to enlarge.

 

Similarly, Apple looks like a surefire winner, especially with the company positioning itself via Apple Pay to take a small piece of every retail transaction that occurs. Indeed, if there is a good reason to think U.S. stocks will continue higher in 2015, it is that the shares of Apple, the most valuable company in the world, look so promising.

I’ll mention T-Bonds as well. They were my no-brainer, shout-it-from-the-rooftops bull trade in 2014, producing capital gains of 20%-plus, and so they shall remain. I expect long-term treasuries not only to continue their long-term uptrend and yields to continue falling in the year ahead, but for years to come.

 

TYXThe 30 year t-bond yield and the 10-year t-note yield over the past year. This strong downtrend in yields in 2014 surprised the vast majority of Wall Street analysts, as well as the so-called “smart money” crowd, as evidenced by the Barron’s “smart money” poll’s consensus on bonds fluctuating between 89% and 92% bears over the year, and speculators consistently holding a huge net short position in 10 year t-note futures (big speculators are currently net short 30 year bond futures as well, but to a far smaller extent). The current net short position in 10 year t-note futures of large and small speculators combined amounts to nearly 386,000 contracts, which is just below a record high. This is quite surprising, as most futures speculators tend to be trend followers. In t-notes, they have been desperately fighting a strong trend all year long and evidently continue to do so – click to enlarge.

 

Dow ‘Only’ to 19457?

Some final notes: Some of the bull/bear targets paired in the table above could both be hit, although not necessarily in the same year. That goes for bullion, where my forecast allows for a bull market to begin after a bottom is reached sometime next year.

Obviously, the $2.06 target for a barrel of crude is an extreme outlier. I’ve included it simply because, strictly speaking, that’s what the charts indicate now that January Crude has fallen beneath a key ‘midpoint Hidden Pivot’ at 55.43. A rally back to that price would theoretically be short-able. Indeed, any target given above can be used in two ways: 1) getting long or short with the implied trend; and/or 2) playing for a reversal at the target itself.

Regarding the Dow, I was surprised myself to see that, from a purely technical standpoint, a mere 19457 would seem to be as bullish as it gets. You should jot down 18973 as well, since that Hidden Pivot also has the potential to reverse the bull’s nearly six-year rampage.

 

INDUThe DJIA in 2014 – the red dotted line indicates the pivot at 18973 – click to enlarge.

 

Table by Rick Ackerman, charts by stockcharts, chart captions by PT

 

This article originally appeared on rickackerman.com.

 

 

 

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