Cycle Forecaster

One of the more interesting and unusual technicians I read is Charles Nenner (previously discussed here, here and here).

I am not an Elliot Wave analyst; I don’t really understand the subtleties of it, but I do know it is based upon the Fibonacci Sequence, developed by Leonardo Pisano Fibonacci in the 13th century,  where each Fibonacci number is the sum of the previous two (1, 1, 2, 3, 5, 8, 13, 21, etc.).

That is the basis of the Elliott Wave Theory, discovered by the Ralph Nelson Elliot

Charles developed his own proprietary algorithms based on Fractals, recurring cycles and Fourier analysis, which he uses with Elliot Wave analysis. (Complex enough for ya?).

Because his system assumes human interpretation of events never changes, it therefore applies to all four categories of tradable instruments: commodities, currencies, equity indices and interest rate instruments.

A couple of guys nailed the top, and some caught the bottom – Charles is the only guy I know who top ticked the highs in May, and nailed the bottom in June.


UPDATE: May 24, 2006 6:30am

The WSJ’s weekend edition had a blurb on Nenner — it answers some of the questions raised in the comments:


Elaine Garzarelli. Abby Joseph Cohen. And now Charles Nenner?

In every tumultuous market, investors seek out a guru who can divine a market turn. This time, investors are finding comfort in Mr. Nenner, who runs Cycle Forecasting Inc.

Mr. Nenner is about as unconventional as they come. He lives in Jerusalem, spends much of his day studying the Talmud, and sends twice-weekly emails predicting moves in everything from U.S. and European stocks to oil and cattle prices.

Mr. Nenner sent a prescient email predicting that the U.S., Japanese and European stock markets would hit a high on May 10. That day, markets around the globe hit a peak. Since then, the Standard & Poor’s 500-stock index has dropped 5.5% and global markets have fallen further. In late May, Mr. Nenner said the S&P and Nasdaq Composite Index "should now turn down again into 6/14" — a reference to June 14. That too was an on-the-money call; June 14 was the recent low for the stock market.

Now, Mr. Nenner expects stocks to stay strong until July 10 but foresees another weak patch after that.

Soft patch? That’s a bit of an understatement — he’s looking for a major drop; Makes my 30% correction look like child’s play.

UPDATE: Aug 7, 2006 4:52:27 PM

Nenner was on CNBC a little while ago, calling for a major top in early September, followed by a deep selloff thru the end of 2006, and then a strong rally thru 2007. Until I see signs that this present trend is weakening, I am somewhat skeptical. 



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