The methods developed by George Lindsay were used to forecast the highs and lows of bull and bear markets. My Hybrid Lindsay model is my attempt to use the work of George Lindsay to forecast highs and lows Lindsay never bothered with.
Last week’s commentary focused on using my ‘hybrid’ approach to forecast two very short-term turns in the Dow. This week I illustrate how the Hybrid Model can be used to forecast more tradable turns in the Dow.
A very important part of Lindsay’s work was his identification of what he termed basic cycles and multiple cycles. Defining and explaining the identification of those cycles is beyond the scope of this commentary but an intuitive understanding should be easily obtained by looking at the charts below (a full explanation is contained in my book George Lindsay’s An Aid to Timing – the Annotated Edition). What is important to know is that forecasts from these two cycles must confirm one another.
Basic Cycle
Centering the Middle Section forecast on the low of the basic cycle on 10/4/11 we count 930 days backward to the high of a flattened top on 3/18/09. Counting forward 930 days from the turning point (10/4/11) forecasts a high on Friday, 4/18/14 (NYSE was closed on 4/18/14).
Multiple Cycle
Centering the Middle Section forecast on the low of the multiple cycle (10/10/02) finds a high in a flattened top 4,208 days earlier on 4/3/91. Counting forward 4,208 days from the turning point (10/10/02) forecasts a high on Monday, 4/21/14.
Given the convergence of these two cycles, a high in the Dow can be expected either today or very close to today. The forecast can be off by a few days. As the two forecasts are separated by a three-day weekend it is possible the high in the Dow at last Thursday’s intra-day high was the one we are seeking. Alternatively, we may not see it until Tuesday or Wednesday this week.
Whatever the case, we know we are in the “kill-zone” for the rally which began last Monday.
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The April Lindsay Report shows how the Hybrid Lindsay model forecast all the major highs and lows since May 2013 and contains a forecast for the bottom of the expected decline from today.Get your copy of the April Lindsay Report at SeattleTA.
