Bulkowski's 2021 Forecast August Update

This is a graph of the chart pattern indicator (CPI) against the S&P 500 index. Briefly, the CPI counts the number of bullish patterns to bearish ones in the belief that at significant market turns, the bearish patterns will outnumber the bullish ones, or vice versa. The thin blue line at the bottom of the chart is the CPI.

I don't use a lot of indicators in my trading but there's a reliable pattern called a failure swing. That's the M-shaped pattern circled here in red. In this example, the second peak is above the first, so maybe it's not a true failure swing. It suggests the indicator and market are headed lower. I don't know how well failure swings work on the CPI, so treat this signal with care. It could be incorrect.

This is the Dow Industrials in black and the prediction in red.

The forecast peaked at A and was supposed to drop to B. Instead, the Dow has climbed, forming a sort of head-and-shoulders bottom starting at the low in May (directly above A).

Here's a chart of the Nasdaq.

It shows another way to look at the price trend between the two. The forecast is dropping even as the Nasdaq is rising. That's bearish divergence, which I show with the blue lines.

If the delta variant powers up, maybe we'll see the indices drop like the red line forecasts.

Here's the S&P 500 (SPX, really) on the daily scale.

More divergence between the forecast and reality going into the September low.

Here's the Dow industrials predicted move for the next 10 years, shown on the monthly scale.

After about mid summer of 2022, the Dow should post good gains for over five years, peaking in 2028 and struggling from there.