Technical analysis reveals the stock market could soon be forming a blow-off top, which is a common pattern preceding a big move down.
Yesterday, a Z3er named Roger shared his findings from Peter Temple’s World Cycles Institute, which combines the study of historical cycles with Elliot wave analysis to forecast price movements. Roger also formerly worked as an investment analyst for a private equity firm.
Roger explained the market pattern since August 2015, which we have identified as a triple-top reversal (W-shape), indicates we should see one final move up before making the first major leg down. He explained it as follows:
“All bull markets tend to top in one of two ways. Either they hit a new high on extremely high volume with no price movement or they run up really fast toward a new on lower volume and then reverse quickly (blow-off top). Looking at the technical analysis for this market it appears to be a head and shoulders pattern and likely setting up a “blow-off top”. I would expect a final run up toward a new market high (probably 2116 on the S&P) and a quick reversal starting the sell off cycle.”
“The entire pattern beginning last August is a large “Head and Shoulders” market top pattern (your big W). Sometimes individual stocks and markets can breakout to to the upside from a W pattern but this one doesn’t appear to be formed correctly for a breakout to the upside.”
“What happens right before the blow-off top is an initial big move down. This gets the shorts wrong sided then an even bigger and quicker move up. The shorts panic and sell then the longs jump in thinking the market is getting ready to break out. This adds rocket fuel to the up move but then it collapses like an explosion at the top. Everyone in the investment community knows what that means and can see the pattern. There is typically about a 62% retrace from the first big wave down on a blow off top. The top of the 62% retrace is the textbook 2nd short entry point and should be followed by another big leg down.”
Amazingly, Roger’s projections confirm several prophetic revelations. The blow-off top is the technical term for the graph I saw in a vision and shared in a post on March 27. At the time, I had never heard this term, but the pattern is the same steep climb followed by a steep drop followed by a 62% retrace. In my post I estimated the bounce would recover 50% to 75% of the drop, so 62% fits in that range.
Another confirmation is Peter Temple’s estimate the blow-off top will peak at 2116 S&P (18,197 Dow), which is the same number I saw on Friday April 22, which I shared in several previous comments. I was not shown any dates or other details, but I assumed it was S&P because it looks too low to be Dow points. Based on that, I began to reluctantly look for a new top coming soon while hoping for another interpretation.
On May 2, I saw a red 599. Then a couple of minutes later I saw a red 152. The numbers were displayed within a table like what we would expect to see for displaying changes in the market. I understood these were Dow points, but was not shown any dates. Based on Roger’s projections, it appears those numbers would come after the blow-off top.
Roger’s comment about an explosion at the top confirms a dream shared by Jim Reeve in a comment posted on May 7:
“There were some other metaphorical clues in the swimming dream that suggests it was about my options intention (for example, options are cigarettes, because they burn and aren’t healthy for you). What is really interesting is about the explosion at the end (actually, a barrel of cigarette butts exploded).
I was surprised with the explosion. So, I have difficulty believing it is a picture of my potential options “exploding”, as in “expiring”, because that wouldn’t be a surprise in a week’s time. I think it means at the last moment they might “explode”, as in go up. The cigarette butts (nearly expired options) explode in price?? That would be a surprise. So, it hints that there could be a more precise option trade as we get nearer the end of this week.”
As Roger explained above, if the historical pattern is followed, the blow-off top will be preceded by a big move down. The chart below shows his projection with the upward movement from yesterday (May 10) running out of gas very soon, perhaps reaching as high as 2095 S&P (18,017 Dow), as shown with the blue line at point C.
So after reaching 2095 S&P, Roger is expecting to see a drop down to 2045 S&P (17,587 Dow), which is shown as Point E in the above chart. He explains:
“It looks like we are getting close to the top of this current leg up. After the S&P hits 2095 the next leg down should bottom at S&P 2045 before the final leg up to the blow off top. Following that is the blow off top run up from 2045 to about 2116. Blow off tops run up very quickly with large upward price movement. Typically, the blow off and reversal happen in the morning and then spend the rest of the day selling down. The day after the blow off top will be a big down day as indicated on James’ graph. Looking at the timing I’m not sure if we could complete the blow off top by this Friday. It would be my guess that the final run up to S&P 2116 and blow off top happens on Tuesday the 17th.”
The projected drop to 2045 (17,587 Dow) is not far from the current trend line, as shown below in the one-hour chart.
Roger’s projected big move down prior to the blow-off top also confirms another prophetic dream shared by Jim Reeve in which he saw a bearish move down (symbolized by a wet horse) preceding a strong move up (symbolized by a horse on the loose). He shared the following dream in a comment posted on May 8.
“I had a dream last night where I’m at a giant washing machine. I need to get the machine going so I need to push a button. This button recedes deeply, but acts like there’s a spring resistance. I’m wondering if I’m pressing hard enough, because I feel the spring tension as I push (really sounds like VIX doesn’t it?). I did push it enough, because the machine works. It turns out that after the wash cycle, out comes a wet horse. So, we washed a horse. All that water and wetness is a short market, and I think the button is the VIX being pushed up against a spring tension (which really captures the VIX’s mean reverting characteristics). It’s important to see that it’s a horse, because once it’s been washed, it’s released. A horse is definitely bullish, but it’s washed first (bearish).”
Conclusion:
The first step in the eight-step process followed in previous market crashes is to identify the final top because that is ground-zero for the countdown to the bottom. So far, the high was reached on April 20 at 2,111.05 S&P (18,167.63 Dow).
If we reach the projected 2116 S&P within the next week or so, we would have a new top, which means the countdown would reset. If we repeat the historical pattern, we would then start testing support levels with increased volatility during the remainder of May and June. Panic selling would most likely begin in July with the first bottom in mid-July.
A move up to 2116 would be painful for anyone holding inverse ETF’s, but the good news is blow-off tops don’t typically last very long. On the other hand, the volatility also presents great opportunities.
I hope the prophetic confirmations shared in this post will encourage everyone to believe God is helping us, despite some mistakes along the way in my interpretation of prophetic clues. I believe God uses these partial and often misunderstood clues as part of His sifting process to separate those who are trusting Him from those who are relying on their own understanding. The Apostle Paul recognized this danger and warned us not to despise prophetic ministry.
19 Do not quench the Spirit.
20 Do not despise the words of prophets,
21 but test everything; hold fast to what is good
(1 Thessalonians 5:19-21)
As always, these historical patterns, prophetic insights and market projections are not recommendations for investing, but are shared only as a starting point for each of us to seek God regarding what to do with it.
Author: James Bailey
James Bailey is a blogger, business owner, husband and father of two grown children. In 1982, he surrendered his life to the Lord Jesus Christ. In 2012, he founded Z3news.com to broadcast the message of salvation by reporting end time news before it happens.
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Hi All –
The latest from Joanie Stahl
https://aminutetomidnite.com/prophecy/living-in-the-last-hours-of-the-last-days-prophetic-word/
She says Trump will be elected and then cutoff. Out of so many voices out there, she is one I give a bit more credence
In the words the Lord tells her that “Many go about as if they are Mine, but they are not Mine”.
Be a very wary bear….make sure you are truly His. Make sure your repentance is deep enough. Take nothing for granted no matter who told you. Be found a sheep, leave no stone unturned
I recommend EVERYONE read Joanie’s word that Mem posted via link and to distribute broad and wide.
A VERY important message and if you read her message closely it implies an early rapture.
In this original article the word is of a S&P low of 2045 before a blow off top would happen. Yesterday the S&P reached a low of 2043.13 and closed at 2046.61. I have not gained any prophetic insight; just noticed these numbers are matching.
Thanks for sharing that Boris. I also noticed that and included it in my new post. However, if the dream shared today by Mike J is correct, which I added to my new post about the bull, the market will drop further on Monday, but not as much as Friday, then a little less on Tuesday before turning around for a big move up.
I am guessing we would not see the blow-off top until the early part of the following week (May 23-24) after options expirations on Friday May 20.
I did read your new post this morning! Thank you so much for putting it all togather so patiently, James!
So far I have been reading the discussions but not commented much, as I have only once seen a graph in prayer that showed me where to get back into the market when my trading account balance was down to CHF 70!! I’m trading at the margin and keep a low amount of shares at this time to minimize risk of running into another margin call..
This is what Gregory Mannarino says:
https://youtu.be/JpuAxXyriro
Serge ,
Everyone and anyone who has eyes and ears that are open needs to see this video.
Hi Zee
Based on Elliott Wave the S&P will go to a new high at 2116 and then drop to below 11k. It may take two to four weeks to get to 2116 before dropping. This is all based on technical analysis.
Amen Rob great words of wisdom. Like Wayne said no hostility. That’s why they have calls and puts on the same stock. I agree this weekend should be serious prayer about how he wants us to respond next week. God wants and desires for us to work together . I’m adding Amy to my list as well. God bless you brother.
Hi Ed,
Can you explain which stock has calls and puts?
Thanks
Michael,
If you look up a stock and then open the options portion you can either place a call option or a put option on that stock. If you think a stock is going up, someone out there thinks it going down so now you have an option contract on the same exact stock with two opposite views of what direction it will move.Hope that helps
Thank you Ed–I appreciate your comments in the pages!
Thank you Ed! I can’t tell you how much I appreciate it brother! I don’t have a church. All I have is the Bible and to have someone that has faith in our Lord pray for me and my loved ones brings me to tears! Thank you so much. I can’t wait to meet everyone. Hopefully on this side but if not definitely in Heaven. Who cares about the wealth. We are all believers lets just pray for each other and watch our Father love us!
Rob,
Thanks for the kind words. You do have a church it’s right here. I have never met any of the z3 people either but there are more on fire spirit filled than I have ever met in the church “building”.
Z3 family,
Their seems to be two opposing views going on. I know James and many others feel that the blowoff top is coming, while Phanuel, Rob and others feel that we are going to have a continued down trend. I know their is no hostility between the two groups but I feel that we should all pray for clarity. I have been following this site for a couple months now and have made some bad investment decisions. Nobody’s fault but my own. I don’t believe God wants me to lose money but if that brings me closer to Him it is a price I am always willing to pay. Maybe these views and what seems to be opposing dreams is a way that we can come together before our Lord as a unified body to ask for clarity. God wants his people to humbly work together. I am sure of that.
Thank you to everyone on this site. God bless all of you. If you read this please say a prayer for my fiancé Amy that she may come to know the Lord.
Amen let us pray for more clarity! We have 48hrs now until the markets open again.
Amen Rob .. I agree
I’m sure the Lord will clarify before Monday.
I know Lord has been stressing unity. Shalom!
*I know the Lord
Rob, a very good point. We need to work together in unity.
I believe there is no hostility, just different opinions, interpretations, and perspectives. We are all seeking His truth. We should pray for clarity since we seem to have mixed signals within the Z3 Family. Certainly, in the next 2 weeks we will have a more clear picture of where these markets are going.
May the Holy Spirit touch Amy’s heart leading her to invite Jesus Christ in to be her Lord and Savior. I’ll include her in my prayers.
God bless both of you!
Thank you so much brother! You can not know how much it means to me that you are praying for Amy! Who cares about our wealth. The souls of our loved ones are infinitely more important. If I die broke and poor and one person gets saved because of it I will be infinitely more happy in Heaven. I surf so I will be getting barrels with Jesus!
I could be wrong but I don’t think we have several weeks. I think this could happen next week. If we are going to reach the last point of S&P 2116 I don’t think it grinds it’s way up there. Definitely not if it’s a blow off top scenario.
I agree. Based on several prophetic insights combined with your technical analysis, I am guessing we see the top within the next week to ten days.
I have to agree with Wayne C’s warning, because every time I want to sell FAZ, I have an uneasy feeling in my spirit. A couple of months ago, I asked the Lord if I could have a dream about the stock market crash, because I never had a dream about the markets. I have had many dreams about other things in the past, that did come to pass. That night I had a dream where I was watching the market on my computer, then suddenly, these huge red candlesticks starting forming very fast, and the market starting falling very fast. I was not shown any numbers, any dates, or which market I was watching crash, but I do watch the DOW more than any other markets. I believe many will be out of FAZ when that happens.
Candles are lit on sabbaths and feast days. Once when i was prophesying in a church and they ignored the warning, i had an open vision of a huge menorah made of twigs that had no light (lord removing his presence and light). Very serious. But you have both his presence and light. This will happen very quickly, the speed of it will take many watching the markets by surprise. But the Lords people will not be taken by surprise, we will know the day of a visitation because we are listening and watching for the Lord to move on our behalf.
Amen sister, Praise the Lord Jesus:) He is our Light, Our Hope, and our Salvation.
S&P should go to top now @ 2116. Elliott wave shows three waves up – Peter Temple World Cycles Insititute – whose writings this blog is based on) says it may take a while, which I take to mean two weeks or so
John, where do you get the idea S&P will go to 2116. Like many have learned on this board, you should not believe every ‘revelation’. We could have a big sell off starting next week and you’re still stuck up on 2116. Just saying.
I agree because the Dow would have to climb by over 600 points from where it closed today. That is not likely to happen in one or two days.
Kenneth Rogoff, Harvard professor, chess grandmaster and author of the widely acclaimed book This Time Is Different, just sent shock waves through the global elite by recommending that emerging-market central banks buy gold to diversify their portfolios away from dollar holdings.