TRACK RECORD

EW-Forecast

Table of Content

September 20th 2001 – This chart depicts the long-term downtrend unfolding into a double zig zag pattern as super-cycle wave B . It is labelled subdividing into cycle degree, A-B-C-X-A-B-C. The secondary C wave is shown unfolding into a smaller five wave pattern, taking the form of an ending-contracting diagonal - primary wave 3 in progress projecting declines towards 3.000%. Ultimate targets for wave 5 of C measure towards 3.205 several years into the future.

June 17th 2003 – Primary wave 3 has declined into target area at 3.000% per cent. It is shown unfolding into a single zig zag pattern and subdividing into intermediate degree, (A)-(B)-(C). Extending wave (A) by fib. 61.8% projects the finalisation of wave (C) towards 2.978+/-. The traded low at this time was 3.069 and this effectively marked the absolute low. Yields promptly began a prolonged upswing as primary wave 4.

March 16th 2004 – Primary wave 4 ’s advance from 3.069 is expected to unfold into a single zig zag pattern subdividing into intermediate degree, (A) (B) (C), 5-3-5. Wave (A) completed a five wave advance to 4.664 and is followed by wave (B) declines. At the time of this update, wave (B) was approaching completion, measured to 3.601-3.510 by extending minor wave a. by fib. 61.8% and converging with fib. 61.8% support. The actual low recorded was 3.646 resulting in an accelerative reversal that began the next advance as intermediate wave (C).

June 21st 2004 – With reference to the previous chart, intermediate wave (A) of primary wave 4 was itself a large advance from the 3.069 low, and when this high of 4.664 was extended by fib. 61.8% to project wave (C)’s high to 5.651, we recognised this would change the contracting diagonal pattern into an expanding variation. This monthly chart includes the expanding diagonal as cycle wave C for the first time. It also lowered ultimate downside targets from 3.205 to 2.698.

June 21st 2004 – This chart published on the same date as the monthly focuses entirely on the ending-expanding diagonal pattern. The revised upside targets for primary wave 4 are included towards 5.535, measuring a fib. 100% equality ratio for intermediate waves (A) and (C). After the completion of wave 4, a reversal decline is forecast to begin forcing yields sharply lower as primary wave 5. Fifth waves within expanding diagonal patterns are the most accelerative, and severest of the impulse sequences, 1-3-5. Ultimate downside targets are towards 2.605. This forecast was indicating an event-driven catastrophe for the economy lies ahead – why else apart from a recession, or worse, would this pattern depict a massive decline?

June 6th 2005 – Almost a year has passed and primary wave 4 upside targets remain unchanged at 5.535-5.661. The yield during the last twelve months has drifted lower, but in this update, was forecast to resume its acceleration higher from 3.985.

January 26th 2006 – A continued advance from 3.985 has taken the yield to 4.482 but there is still a long way to go to complete the high for primary wave 4. Upside targets are still fixed towards 5.651 but we have changed the pattern from a single zig zag to a double pattern to justify the three wave decline unfolding from 4.902 to 3.799.

June 11th 2007 – The last stages of primary wave 4 ’s advance are closing in on the 5.658 area. We realise a reversal signature would verify its end at any time. The yield traded another 20 basis points (bps) higher to 5.382 then staged its reversal to complete primary wave 4 from its beginning in June ’03 to its high in June ’07 – four years later! The annual cycle has created major reversals ever since! The downside forecast for primary wave 5 can hardly be believed – to 2.605 per cent, a total decline of 277 bps. Wave 5 must subdivide into a single zig zag (or multiple sequence, i.e. double) and we can immediately gain an insight to intermediate wave (A)’s downside target by cutting the entire decline by fib. 61.8% - projecting 3.500%.

May 5th 2008 – The yield collapsed and settled at 3.284 to end intermediate wave (A) – a total decline in this first phase of 209 bps, and only a deviation of 21 bps from original forecasts. Wave (B) rallies are expected to be short and quick in recovering, about a 50% retracement, then declines to resume as wave (C) with targets to new 21st century lows. Downside targets remain unchanged at this point, although we have issued a warning that wave (A) could be extended by fib. 61.8% to produce a lower target at 2.435.

January 19th 2009 – Intermediate wave (C) effectively collapsed, breaking even our most ambitious downside targets of 2.605-2.435 momentarily trading at a low of 2.033%. This is typical of exhaustion sell-offs, especially characteristic of 5th waves within ending-expanding diagonal patterns. Task completed! Not only has primary wave 5 ended, but the entire diagonal pattern that began from the high of Nov. 1994 – 14 years in the making. But this also marks an historical low because the entire double zig zag pattern has also ended from its start point in 1981 at 15.840%. What next? As you can imagine, now that the medium-term counter-trend decline has completed, the yield resumes its long-term uptrend – the only question remains is this - how quickly do yields begin to rise and for how long?