Momentum Structural Analysis 2011 Momentum Structural Analysis MSA

Momentum Structural Analysis © 2011

Momentum Structural Analysis (MSA) has provided proprietary technical research exclusively to institutional clients since 1992. MSA has taken technical analysis beyond the old orthodoxies of “price chart analysis. ”

Price chart action is literally what everyone sees, fundamental and technical market-watchers alike. Too often price action imparts a false sense of confidence in a trend, and misleading notions of support and resistance.

MSA seeks to anticipate trend changes, before such changes become widely noticed and acted upon by investors and portfolio managers alike. This professional objective requires both a solid method and experienced application of that discipline.

Technical analysis, if properly used, should be done by professional technical analysts, in the same way fundamental analysis should be done by professional fundamental analysts.

As a professional technical research organization, we function as an adjunct technical department to our clients. We do the work. We produce the analysis. The client firm then utilizes this technical input in the manner best-suited to its style and needs.

Any fundamental or technical research firm can cherry-pick from among its many reports to highlight research successes.

Instead of that approach, this short visual introduction to our method will focus on The 6 Major Market Trend Events of the past seventeen years.

We will show via actual, archival MSA reports , what we said and when we said it.

MAJOR MARKET EVENT #1 THE BLOW-OFF OF 1995 -2000 Analysis: • 1993: Early warning as blow-off conditions develop in the background. Factors predefined. • February, 1995: MSA signals that the blow-off has now begun.

February 8, 1993 “…clear presence of a major momentum justification for a blow-off… the preconditions being delineated at this time. ”

“The blow-off is a rare market phase which is built from pent-up frustration…(from an) inability to reach a level which equalizes supply/demand factors. ” “Blow-off ‘solves’ the problem by pendulum swing to historical excess…”

Identifying technical preconditions is helpful, but it is more important to identify trigger points - the points of action. Massive downtrend line on quarterly momentum of Dow (and S&P) was waiting overhead. It would be 8 quarterly bars later before this oscillator would break out over this structure.

February 23, 1995 Quarterly momentum structure on S&P 500 breaks out. (This oscillator in point-and-figure format). “Expect increased volatility to now begin, and probably not to return for several years.

MAJOR MARKET EVENT #2 2000 TOP Analysis: • Annual momentum breaks massive support in first days of Jan. 2000 • MSA forecasts this as major top - equal and opposite to the blow-off buy signal of Feb. 1995

Prior low of late 1999 also not violated. Before Price chart we Therefore, look on the at the top no 2000 major is in Annual momentum oscillator Major structural violation in price reports, quarterly chart a broad-stroke damage. price bars. Price Note: look chart at (bottom chart) shows quarterly first days of first quarter 2000. uptrend breakage price and intact did momentum not through occur end from untilof ranges plotted vs. 3 -year Unequivocal breakage! 2001, 1994 three to 2000. end hundred of 2000. points average. from the high.

Momentum provides a different Momentum usually warns of vantageprice point from widelychange. watched price charts.

“S&P annual momentum breaks 5 year uptrend” Jan. 4, 2000 “…equal and opposite signal to Feb. 1995 buy signal…”

“The market might for a while ignore and forget what it did due to countervailing and more to the Jan. near-term 9: “Last pressures week did damage…I, as a upside in miscellaneous sectors, but I think this signal is technician, can’t overlook oraforgive the solid sign that the year 2000 is likely to turnbreakage. ” out differently from the past 5 years. It’s been ‘pre-announced’ in my opinion. ”

MAJOR MARKET EVENT #2 2000 top Minor event: Enron Analysis: • MSA warns of pending downturn in ENE • Specifies actionable numbers

p o st 5 d e $7 t s e gg below u S t ou “…heightened concern about the health of this trend…”

MAJOR MARKET EVENT #3 2002 Bear Market Low Analysis: • Prior to the bottom MSA explains the “Major” long term nature of upcoming market low • Pre-defines price zone of bear market bottom

July 20, 2002 “The. Weekend market’s Report obvious intent to destroy all of its previous malinvestments in one fell-swoop has At time of this report, S&P shortened clock, and was at 850(the) and natural collapsing madeinthe likelihood of a major low – in slabs. The following thisweek, moveit–would all themake greater…market its forcesfirst want cleansed lowtoatbe 775, to be totally and in excess now. Sobybea it. ” followed in October final low at 768.

All long-term momentum trend factors were arguing for a majorthe low. 10 -yr. And avg. in each For example, oscillator case, tracing the indicator provided a of S&P, back decades, argued generalalong level the for that low. of the for support bottom Plus, there waschannel. much massive trend agreement between the various indicators.

The consensus of long-term momentum indicators of the S&P 500 suggested a likely low for the bear market “between 815 and 757. ” The final low was in October 2002 at a price of 768. The report concluded “The market has now put itself into the category of years which were major lows: 1931/1932, 1938, and 1974. ”

MAJOR MARKET EVENT #4 2008 Sell Signal, S&P Analysis: • MSA defines nature of pending annual trend breakage • Specifies actionable number

Signal soon occurred; Annual trend breakage index dropped 200 specified as trade to points in the next two 1456 weeks

MAJOR MARKET EVENT #5 2009 Bottom, S&P Analysis: • MSA defines action from October, 2008 to early 2009 as bottoming process • February 24, 2009 report specifies target low

10 days before bottom. Forecasted Major Low “soon”

At time of this report, S&P was at 772. Low close 676 Target low was specified the 722 following as for thatweek or 670 if low occurred following week.

MAJOR MARKET EVENT #6 2011 Top Analysis: • End of 2010, S&P at 1257. Most analysts project S&P to reach 1500 in 2011. • In contrast, MSA projects minimum downside in 2011 to reach 1170 s

By August, “MSA’s. S&P technical reached view…issued MSA’s bareatminimum the beginning downside objective of this 2011, was of 1177, that at and some then some. At time of mid-year report, S&Ppoint 500 in Only 2011 then it wasdid highly Major likely Wall that St. firms the S&P rapidly 500 still above 1300. would reviseatdownward bare minimum their previously trade downpositive to its 1 year moving projections. average. ”

THE 6 MAJOR MARKET EVENTS Of The Past 17 Years • Blow-Off 1995 -2000 • 2000 Top • 2002 Bear Market Low • 2008 Sell Signal S&P • 2009 Bottom • 2011 Top

In each of these major events, the proprietary methodology of Momentum Structural Analysis • ANTICIPATED the massive trend changes • PRE-DEFINED the nature and time-scale of the changes • SPECIFIED actionable numbers

Basic Research Services • Ongoing assessment of major U. S. indexes on all time-scales: long-term, intermediate, and near-term • Assessment of sectors and sub-sectors • Technical relative performance of sectors v. broader market and relative technical performance of component stocks within sectors • Continual monitoring of key markets outside of U. S. stocks: bonds, oil, gold, dollar, and major foreign indexes Expanded Research Services (in addition to Basic Services above) • Portfolio sifting: monthly assessment of each stock in client portfolio Includes full technical health assessment of stock – support, resistance, trend-change potentials, working targets

Contact us For more information, please contact Michael Oliver at (720) 379 -8416 (phone) (336) 706 -0471 (cell) jmoliver@olivermsa. com MSA is happy to provide a complementary 30 -day trial of our research services to institutional clients. Please make your request via email to the address above.