The S&P 500 index has arrived to its bottom

However, this bottom could be only a temporary bottom.



Dear followers,

Here I am with my monthly report.

The last movement of the S&P 500 has surprised many traders and investors.

They are wondering: “Has the S&P 500 arrived to its bottom now, so that I can buy again?”

First of all, I have to explain that the drawdown of this index is due to a reduction of the expected value of US GNP.

The value of the index has almost remained the same in the last 5 months: 1990 about.

The expected dividend for 2016 has not changed. Interest rates are stable and the financial risk of this index has not changed.

Only one thing has varied a lot. The GNP has passed from 2.2% to 2%. It may seem a little change, but it has provoked the last downfall.

However, the 2% of growth of the GNP is the same value that was expected during the last bottom in August 2015.

The graphic of the S&P 500 tells us that its fair value was about 1990 in that period.


















When its price was under a 6% respect its fair value in the bottom of August, great funds started to buy.

Now, this index is in a similar situation: its price is under a 6% respect its current fair value.

Should we buy now?

It is likely as there are many buy volumes in the last bottom.

However, the real question is: “Will a simple pull back take place or will a new uptrend take place?”

If the growth of US GNP decreases, there will be a new downtrend after the next upward pullback.

This is sure. It is a simple mathematical formula.

Is there any way to understand what is the most likely scenario?

You should ask to the FED bank about its willing to print new money for real economy. I do not know anybody there inside.

My aim is to catch the next pullback and then to understand if the S&P 500 will go higher respect its last top.

As regards a likely pullback, let us ask to our two etfs that are our friends: QQQ represents the S&P 500 and QID is an inverse etf respect the S&P 500 value.

Here are their charts.


qqq chart












qid chart




















Can you see high volumes on the top of QID and increasing volumes in the bottom of QQQ?

I think that they represent a rollover of money from short to long positions.

Therefore, a pullback is very likely but I think that the main trend will be downward until May 2016.

If economy worsens, the GNP growth can go lower than 2%.

What about my index forecasts? Were they wrong?

My forecasts are right the 75% of times as they are based on a fractal study of the past.

If something important changes, they have to change. There cannot be only one possible future. We have never to forget this.

The following forecasts suggest that a pullback is coming and that a new top will take place around either the 15th of February or the 29th of March, if nothing else changes dramatically in the meanwhile.


S&P 500 stock index forecast updated on 15th of January 2016














Nasdaq stock index forecast updated on 15th of January 2016























The forecast of the Italian index seems to be enlighting as regards European weak economy an how this one could impact on the US stock indices.

Here is its chart.


Italian stock index forecast updated on 15th of January 2016



















This could be another scenario but we can see a pullback much better.

Are there stocks worth buying in this pullback?

I think that the leading stocks are the best ones.

As I have promised, I will inform you about one of them in the next days. I do this every three months for my followers.

My conclusion is that making money in an unstable stock market without a stable trend is very difficult. Surprises always occur.

A trend follower can make money if there is a continuous trend to stay with. However, this is an unstable economy as there are problems everywhere in the world now. This makes trading a great challenge.

Personally, I think that this just-started downtrend can last for some months and we will take advantage of it when it is more stable.

The “European forecast” of the stock market for the next few months looks to be the most likely for US stock market too.

Share my article with your friends. You can find the buttons here below.


Kind regards,



I will control new groups of stocks

I have increased the group of stocks that I will keep under control.




As 2016 is a new year and it has just started. I wanted to do something new.

I have thought to enlarge the group of stocks that I will observe. Not only NASDAQ and S&P 500 but also NYSE and Amex.

This thing will make my work harder from one side. However, a greater number of stocks will let me know what the true winners will be in 2016.

As you know, 2016 is very likely to be a year with an uptrend. However, it may have some unpredictable movement.

Economic word instability will make things more difficult.

Therefore, I have thought to make things simpler by the choosing only the best stocks in some more market.

I mean those companies that do not suffer from economic instability too much.

I have enlarged my point of view.

I think that this shift can bring me great opportunities.

Happy New Year and good trading to everyone.




The fair value of the S&P 500 and its meaning

How to calculate the fair value of the S&P 500



Here I am with my monthly update.

The first question is now: “What has happened to the stock indices after the raise of interest rate by the FED?”

An index is similar to a stock as regards its fair value.

You can calculate it in many ways.

I prefer this method for an index (it is a simplified formula):

FV S&P 500 = S&P 500 dividend yield / (quarterly data risk premium + 1 month T-note interest rate – % GNP).

It becomes:

FV = 42.32 / (4.18 + 0.16 – 2.2) * 100 = 1977.57

This value is not too far from the close value of the index of 1995.33 on the 17th of September 2015.

Nothing happens by chance in the stock market. It is only a question of mathematics.

In general, I can say that investor analysts agree now with fact that the fair value of the S&P 500 is in a narrow range between 2000 and 1977 points about. I think that this happens with whatever formula they can use. It is distance of about 1.16% between these two values.

This mean that the raise of interest rates by the FED was already discounted by the stock market.

Therefore, what is about to happen to the S&P 500 and to the NASDAQ stock indices?

If the growth rate of US economy improves, the S&P 500 will increase its value every month.

Let us look at the forecasts.


S&P 500 stock index forecast updated on 18th of December 2015














Nasdaq stock index forecast updated on 18th of December 2015














Italian stock index forecast updated on 18th of December 2015

























They tell us a story. They are telling that both the NASDAQ and the S&P 500 will face a quarterly bottom between the end of December 2015 and the end of January 2016. Then they should go up again if things improves and nothing bad happens.

Economy is something that varies every day. Every day, the fair value of financial instruments can change.

A trader should always adapt to whatever change of conditions, this makes trading both difficult and interesting.

I am willing to buy new very good stocks in that period. In fact, the most of stocks that are quoted are returning to their fair value in these days. This is the message of the S&P 500.

I have sold all my stocks recently for this reason. I have suggested to my customers to do the same.

The second question is: “What will be the stocks worth considering in the next bottom?”

I give you an answer with an extract of a book “Superperformance stocks” by Richard S. Love, that you can find in page 82 – Chapter 7:


“A winning combination in potential superperfomance stock is rapidly rising earnings, a small supply of stock, low P/E ratios, and a product that promises strong future growth.”


Here again, we face the problem of fair value and growth. I remember that being a trend follower trader means to me to be a follower of increasing fair value companies. It does not mean simply following a price that goes up and catching all the spikes that a stock can have.

There must be a fundamental reason because a company increases its fair value. I want to see that reason.

Because of this, I can’t anticipate what are the best stocks to buy know. I have to wait for the next bottom and stocks will tell me which of them will show a shared interest as an investment and why.

They will be maybe the oil stocks if the oil price will go up or the bank stocks. Who knows? Stocks will tell us what are the most interesting worth buying.


Even if I use a different method in selecting stocks respect the previous one, some fundamental concepts must be understood.


Last but not least, I tell you that I have developed an interesting approach in defining the fair value of company with Bollinger Bands recently. I keep on doing mathematical research to look for something interesting as regards the stock picking argument.

This instrument will help me to select company better and better in the incoming bottom.

Remember that a new 5-year cycle has just started and this increase of the stock indices looks to be only the beginning. New occasions will take place.

This is all for the moment.

I wish you a Merry Christmas and remember to share this post with your friends.

Kind regards,




Have you seen that…

My outlooks were right.


Dear followers,


I am writing this post just to tell you that the S&P 500 index and the Nasdaq index are following my forecasts.

The Nasdaq index has broken up its previous top and the S&P 500 is about to do the same.

This means that a new uptrend has just started or it is very likely to do so.

Keep on watching this movement. It is important.

The stock that I suggested you at the beginning of October for FREE (LLTC) is now up a 10% about respect my buy price.

It has not finished its climb yet.

Bear in mind that I will offer you another free buy signal in the next weeks as I am used to maintain my promises.

I mean that I am used to suggest one good stock to buy to all my followers every three months for free.

If you like more results, you can visit my private membership area.


Remember that trading means buying stocks whose fair value rises over time because the relative company improves more and more.

This is true even if you are “only” a technical trader as I am. Technical analysis is a slave of fair value behaviour. It is difficult concept to understand, but it is so.


Instead, gambling means putting money on a stock and hoping that it can have a spike of price.

This is not trading. This is only gambling.


I am interested in those companies which rise in price because there are serious reasons for that.

Infact, my usual question is: what is the fair value of a company? Is it about to go up or down?

Then, I make my choice with technical analysis.

If the whole stock market increases, what is happening to its fair value now? It is…

This explains that there will be more stocks to buy in the next few weeks.

Trade well and take you trading risk small.


Kind regards,



Just an update about the stock market

After the terroristic attack in Parish, I want just to insert a quick report about the stock market.

Even if it is very difficult to talk about stocks after that fact, because there are no words, however, life goes on.

Therefore, the question is: “Has that terroristic attack influenced the dynamics of the stock market?”

Here is my updated forecast of the S&P 500.


S&P 500 stock index forecast updated on 13th of November 2015



















If you compare this forecast with a previous forecast of the same index that you can find in a report here below, you can understand that there is no consistent difference.

This means that even if there are signals of a new war of European countries against Isis, the current economic recovery should continue.

However, bear in mind that this is a moment of great uncertainty. When there is uncertainty, trading is more difficult. I prefer to play this game more safely now.

Paul Tudor Jones has inspired me with this consideration:


paul tudor jones wisdom





















I hope that everything will be solved as soon as possible.

I just suggest waiting for new signals of a new uptrend to take place before trading once again.

It is quite logical that the fair value of companies cannot increase certainly in an uncertain moment.

Let see what is going to happen in the next few days.

Let see if my forecast model keeps on working.

Kind regards,



  • Fredrick


    This is MY PERSONAL and OBJECTIVE point of view about US stock market.









    Ticker % Gain/loss Current price Buy price Buy date Sell price Sell date
    LLTC 6 44.26 41.79 9 OTT 15 44.4 09 Dec 15
    EMKR -11 7.62 8.1 7 DEC 15 7.2 10 Dec 15


    Ticker% Gain/lossCurrent priceBuy priceBuy dateSell priceSell date
    FNFG010.6110.506 Oct 1510.4516 Nov 15
    BLKB-263.2159.808 Oct 1558.4516 Nov 15
    MDLZ-243.1644.4508 Oct 1543.3513 Nov 15
    ROCK342518.808 Oct 1525.110 Dec 15
    TFSL318.4817.714 Oct 1618.1516 Nov 15
    FB7104.195.9616 Oct 16102.414 Dec 15
    SBUX-260.8661.220 Oct 1659.716 Nov 15
    LNCE-933.9438.719 Nov 1535.208 Dec 15
    DOW552.485319 Nov 1555.810 Dec 15
    DIS-4109.91118.319 Nov 151134 Dec 15
    PLAB1512.6410.8730 Nov 1512.514 Dec 15
    VRSN-4909307 Dec 158914 Dec 15

    Ticker % Gain/loss Current price Buy price Buy date Sell price Sell date
    INTC 2 34.7 31.3 6-Oct 15 32.05 16-Nov 15
    XOM -2 75.23 79.45 8-Oct 15 78 16-Nov 15
    CVX 0 85.81 87.95 8-Oct 15 87.9 16-Nov 15
    COP -5 47.65 55 8-Oct 15 52 16-Nov 15
    BAC 5 17.39 16.19 16-Oct 15 17.05 09-Dec 15
    AAPL -6 117.5 118 26-Oct 15 111.5 16-Nov 15
    TNGO -17 8.25 8.6 29-Oct 15 7.1 9-Nov 15
    NBL -8 31.4 38.55 3-Nov 15 35.3 16-Nov 15
    JPM 1 66.29 65.3 3-Nov 15 65.7 09-Dec 15

  • Undervalued stocks are used to appear two times a year. It is great to buy them!

    Undervalued stocks are used to appear two times a year. It is great to buy them!
  • Buy the strogest stocks that go up faster!

    Buy the strogest stocks that go up faster!
  • If you need a personalized course or personalized lessons, I am ready to teach you. Choose the argument!

    If you need a personalized course or personalized lessons, I am ready to teach you. Choose the argument!
  • This is a complete customizable trading system. It is simple and it works.

    This is a complete customizable trading system. It is simple and it works.
  • One quick solution to your trading problems? Search it here!

  • Recent Posts


                ATTENTION PLEASE…
  • THERE IS A BEAUTIFUL GIFT FOR YOU, IF YOU SUBSCRIBE TO MY NEWSLETTER: my book “The truth about stocks: how to trade and to invest in stocks without fear”. There is also much more…

    THERE IS A BEAUTIFUL GIFT FOR YOU, IF YOU SUBSCRIBE TO MY NEWSLETTER: my book “The truth about stocks: how to trade and to invest in stocks without fear”. There is also much more…
  • Federico, l have to say that it's very unusual to come across someone that is as open and honest as you are.
    You openly show all your calls including the loses. Such honesty should be rewarded.
    I will continue to follow you and thank you so much for your time and efforts.

    Angela P. (UK)


    Dear Fredrick you are a very serious and reliable person.
    You have always given to me pieces of advice and information that have revealed very valid.
    What distinguishes you is the seriousness and the love that you use in doing all this.
    Thank you.

    Azzurra Z. (IT)


    I just happened upon your site in the last few days and am satisfied with your attempt to communicate. I will continue to follow until I see a noticeable lack of "something" like sound advice, logical remarks and well put sentences. Should I notice what I feel are these and other short comings, I will attempt to email you at this address and share my concerns. I know you want to be a success at this and I support your endeavors. Be patient. Asking us for input today, that's a good idea.

    Ben W.


    Hello Fredrick,
    I happened to bump into your blog and i must tell you that i'm glad i have. I'm an aspiring trader whom wants to develop a trading method like you have since i dont have the time to daytrade....
    I would appreaciated it if you can give me further explanation and i was also wondering if your willing to take me as your apprentice to teach a good strategy like the one you've acquired. I have experience position trading but i need a good foundation like you have. ...
    Thanks in advanced,

    Harley D.


    Hi Fredrick
    First of all I wanted to thank you for your analysis on the Italian market and the Nasdaq.
    I found your suggestions very helpful and I followed all the signals of the newsletter with great results.
    Best regards

    Domenico S. (IT)


    Hello Fredrick, some time has passed and I wanted to write to you to thank you warmly for your weekly counseling about markets.
    I want also to congratulate with you for your forecasts that are always accurate and detailed. My regret is that I have not always followed you.
    While I am saying bye to you, I want to espress my best wishes to you for the great work you are used to do in your website.

    Bye and thanks again.

    Andrea Z.


  • Important: 10 questions and 10 answers about stocks

    Read the linked article by clicking on the yellow question mark

    Read the linked article by clicking on the yellow question mark


    If you subscribe to my website you will be always informed every time I insert a new article. I will deliver you my book and ... something more... Welcome on board!