Socrates Technical Analysis Prediction Magic

The difficulties in following Martin Armstrong's Socrates trading advice

Why and how can Martin Armstrong and affiliates claim (make it appear to the untrained eye) that the Socrates system of Technical Analysis always creates the correct trading signals, makes the correct prediction and is free of human bias and never wrong?

The answer is very simple. The system produces multiple conflicting signals to choose from. In hindsight, one of the correct ones is chosen as the winner and the incorrect ones are ignored. That's it! We always win.

To explore how we get there, let us first look at the problem of forecasting from the rear vision mirror perspective - in hindsight.

Let's assume for argument's sake a scenario where we use a smart trading system that produces three possible signals from a single output: Buy, do nothing or sell.

We use that system and look in hindsight at a market situation, say a stock rally. We wanted to profit from it, but our system failed and advised to sell, so we sold and traded with a loss. Naturally, we review the situation and ask ourselves:

What was the signal that we missed that would have told us to trade in the right direction, the opposite direction?

Our system is a system that has only a single output, so there is no way we could have traded differently. No such signal!

Martin Armstrong would have had this problem when designing Socrates at the very beginning.

To solve this problem, Martin Armstrong would have extended his system to have multiple outputs to choose from. These outputs typically produce different results in any given market situation. Let us see how this is implemented in practice by inspecting the signals from a Socrates report in a single time frame, say daily, on the same day (quotes from actual reports):

• Our Daily level momentum is bullish
• The trend indicator is neutral
• Our long-term trend is bearish
• The cyclical strength indicator is bullish
• The market is trading above one indicating pivot implying that this market is in a positive position
• With respect to time, there is a prospect of a decline moving into (the following day)
• The overall tone on the Daily level is negative since the last Daily Bearish Reversal being elected ...
• The broader tone of the market is still positive on this trading level.
• The Oscillators are in a mixed position.
• Immediately, our (Energy) model continues to rally suggesting that a strong rally is likely. 
• We have elected a Bearish / Bullish reversal

Additionally, we may get:

•  Fake elected Reversals count
•  Superposition event canceling a recently elected reversal (Refer to Revision Signals)

These can all appear on the same day.

Then there are signals that must be considered but they are not in the reports:

•  The NON-election of a nearby Reversal (the most mysterious "signal" one could imagine)
•  Reversal One Percent Rule
•  Reversal gap

We are counting 16 signals in a single time frame. When we multiply this by 3 for daily, weekly and monthly time frames to be conservative, we get 48 signals to choose from, each of them may have different directions.

The Socrates system does not provide a computerized solution for consolidating these signals into a meaningful response, so it is a matter of human interpretation to find the correct conclusion.

Now let us look how this expansion is exploited to always produce the correct result in hindsight, by means of an example:

Wheat Futures Example

Let's try again to trade it, this time monthly reversals. Date elected: 2019-04-30, traded for one month until 2019-05-31
GDAX monthly bullish 5% loss
GDX monthly bearish 3.4% loss
SP 500 monthly bullish 6.6% loss
TLT monthly bearish 6.6% loss
/ZW Wheat futures monthly bearish 17.4% loss

On Friday, 2019-04-30 /ZW Wheat Futures definitely elected a Monthly Bearish Reversal, that, if had it been traded for the month, would have produced a loss of 17.4%. Martin Armstrong's response to this dilemma is to gaslight (blame) the user as follows:

Martin Armstrong's Response:

I saw your incredibly uninformed comment on wheat futures if you had the trader service you would know that MAY was a turning point and there was a MAJOR monthly bearish reversal just below which was not elected the only charlatan here is you.

In clear text, this means that in hindsight, the correct conclusion would have been to ignore the ELECTED Monthly Bearish Reversal, and instead to pay attention to the NOT ELECTED next reversal, i.e. a missing signal.

The undisputed fact is that at this time, the implied rule, the "Elected Reversal Invalidation Rule" as I call it, which forces the invalidation or negation of an elected Reversal by another non-elected Reversal, does not exist in any of the Socrates reference documentation The Reversal System.

In addition, the user needs to consider the turning point, the timing information from the forecast arrays. There is no signal that the system puts out that would indicate this choice. The user would have had to carry out research to come to this extremely far-fetched conclusion. A system of maximum effort for negative returns.

The answer to the question we asked in the beginning is fairly obvious from this example. The conclusion for the correct trading decision can only be made in hindsight by cherry-picking some signals that best fit the situation in the past. That is because there are no rules for how to pick the best mix of these signals for a trade. These rules are made up by Martin Armstrong and his staff in hindsight on the fly to match any situation as required.

Therefore, the Socrates system cannot be used to get accurate and verifiable trading decisions in real time.

See also:

The Reversal System - Engineering Background

Quarterly Superposition Event in Gold 2015

The  Socrates Reversal System at times generates special signals that Martin Armstrong calls "Superposition Events". I prefer to explain these by example because their generation is confusing and complicated.

In physics, the superposition principle states that if there are two or more stimuli at a given point in time, the response will be the result of adding all the responses.

I want to emphasize: "at a given point in time".

Martin Armstrong has been selling Gold Reports for several years. These reports cover an entire year and are usually published in two parts, with updated Reversal values. He also sells Year End Reports. For the 2015 Gold report, recording the statistics of the reversals was amazing. Why did it work so well then? Because it was a full year's worth of steady price declines. Which is trivial for a trend following system.

Then the market turned. The system failed to predict the turn and Martin Armstrong APPARENTLY also missed the bounce, still writing bearish messages in the public blog while the price was already rising. From the trading perspective, this was devastating for his subscribers.

After the fact, months later, Martin Armstrong fraudulently misrepresents the performance of his service, claiming it was right all along because it had generated a long term Quarterly Bullish Reversal with a shorter time Quarterly Bearish Reversal, a "Superposition Event". This is a real Martin Armstrong model case.

Here is the time line:

Gold Report 2015 Update page 14 and below (emphasis added):

When we look at gold in dollars, we can see that the recent collapse into the week of July 20 that fell to 1072 shook the markets but supported the Uptrend Line from 2006. A closing for 2015 below 1184 will keep gold in a bearish position for 2016, warning that the final low may not come until the second Benchmark Cycle convergence. The monthly level oscillators are also still in a bearish position.


Year End Report 2015:

When we look at gold going into year-2015, we see absolute critical support at
1044. A year-end closing g beneath this level will signal new lows and they can
be quite dramatic. From a technical perspective, the two key targets will be
1026 and 601. Important resistance during 2016 will begin at 1179 with key
resistance forming at 1310. Therefore, even a year-end closing for 2015 below
1179 will keep gold in a bearish position.
Additionally, we have a Quarterly Bearish Reversal at 1112. Therefore, a yearend
closing below this level should also warn of a drop becomes possible at
least to test the 875 to 904 former high of 1980. A monthly closing beneath 904
would also point to a drop way down to the 680 area.


Gold elected the Quarterly Bearish Reversal, which is a sell signal.

Martin Armstrong was still bearish until the end of January when gold turned up. His story was that gold after the bounce would make a fresh low on the 2nd benchmark target fulfilling his prediction in the report:

Gold: The Bounce
Posted Jan 29, 2016 by Martin Armstrong
Naturally, the gold promoters are out in full force. The problem with their theories has always been that they are dead wrong. The REAL BULL MARKET will see the metals rise with equities. Right now, the promoters are focused on the stock market and yell, “Buy gold!” because a depression is here. We need to see a weekly closing above the 1143 level to raise any hope of a temporary low. Without that, we have a turning point in February that can be a high moving into the next benchmark target. A closing for January below the 1103 level will warn that there is inherent weakness still lingering within this market. Next month, watch the 1097 level for that is key support. Break that, and we are looking into a low into the second benchmark.

Still he did not mention the Quarterly Bullish Reversal, the Superposition Event.

But later, amazing things happened in hindsight:

Gold Report 2016 Part 1 Targeting the Reaction High and Final Low
Publish date: March 1, 2016 (emphasis added)

Another anomaly was that at the end of 2015, we elected the Quarterly Bearish
Reversal at 1112 closing at 1060.20. At the same time, that low generated a
minor Quarterly Bullish Reversal at 993. So we generated a long-term sell signal,
but a short-term buy signal. The next two Quarterly Bullish generated were at
1308 and 1347. That meant we should first rally typically for 2 to 3 months in a
reaction and if they failed to be elected by the close of March, then the longterm
trend should resume to retest support.

When he writes At the same time, he is not telling the truth.

Private Blog:

Gold Elects Monthly Bullish at $1207 On its Way to $1309
Tuesday, March 1, 2016
...
Our Quarter level of the model generated a Bullish Reversal at the end of the year reversing its short positions and going long. This also signaled that gold would rally from the $1060 area and should test the next Bullish Reversal at the $1347 level.
...

So here we have it the second time. Martin Armstrong claimed that his model reversed its Gold trade at the end of the year from short to long, while at the same time he had advised his clients to be short. Please note that would have been months before he published this event!

Nobody except him ever heard about that 993 elected Bullish Reversal, and about the model's reversal of its positions at the time when this information was needed. Please note that this Bullish Reversal is generated well below market price and it is elected at the same time when it is generated. The number 993 is an expected response of the Reversal system. And it is a reversal in a sense that is generated for clients to examine. But it was not included in the reports which comes in installments with videos, covering a year (not ending at end of year but going well into that period where we should have received that signal). That reversal was not available in any of the materials. So what was this "superposition" event then? It was generated in time but suppressed to provide that front running opportunity, in this case Poop and Scoop for Martin Armstrong.

By now it should be clear that in THIS case, Martin Armstrong's use of the term "Superposition" is misleading and extremely difficult to analyze because he uses the term for an effect that is clearly time-delayed - from the perspective of the objective observer.

The signal that he sends three months later was available to him but it was not available to subscribers at the time when he claims it was generated. So he effectively creates a system failure to profit from it. Being a person who traded precious metals for most of his life, and a person who spent 11 years defrauding clients with his commodity trades, this behavior should not come as a surprise. Here are some anecdotal references that document his agenda of getting his clients on the short side of the gold miners market:

CLARIFICATION

First of all, someone is claiming that I put out some recommendation on DUST. I have NEVER recommended such an ETF and this appears to be a deliberate attempt to mislead people. You can search this blog; I have never made any recommendation involving any specific ETF. The motive behind this scam is curious to say the least.

The above quote is from Dec 24, 2015, right in time when he has the signal and prepares for the market turn.

DUST is a gold miners leveraged short ETF.

By denying that he said something that he never said, he actually said it, and he is effectively telling is audience what to trade.

And here is the theme, the template he was following, so I am not making this up. In

Gold – The So Called Analysts Who Only Say BUY! (archived version, original deleted) he wrote (emphasis added):

I was trading the metals 16 years ago. The institutions always watched me. I traded using Emerald Trading on the floor. These are from a short in silver. They would watch everything I did and try so hard to read me. The funny thing was I was pretty good at hiding my strategy. At the low, I was covering shorts and reversing into a long position. They assumed I was just covering shorts. I flipped my entire position of several thousand lots at the lows. I then had to show them I was long for they would not believe it by bidding aggressively. When they finally figured out I was long and not short, it was hilarious. I was on the phone and heard them screaming – “He’s f–king long. He’s f–king long!” You then saw a short cover rally that was spectacular

In

Wash Trades & Manipulation  he wrote (emphasis added):

When I had to hedge Aristotle Onassis’ platinum positions, it was a nightmare because everyone knows the size of your position. This common knowledge makes it extremely difficult to trade. If you try to sell one ounce, they jump in front of you assuming the whole stockpile is coming. Hence, I would have to buy gold and then silver in small quantities, and then go in for a quote of platinum and sell. They saw I bought the other two and PRESUME I am a buyer. They immediately move the spreads (bid & ask) in ANTICIPATION I will be a buyer. I would then sell the platinum taking small losses on the gold and silver.

 Whether the above is true or not, what matters here is that he is exposing his ambitions in that space.

And he is no stranger in that space. For more of the same by a different account, see:

The Enigma of Martin Armstrong

In case you still believe that Armstrong is not acting as a financial adviser against the law, Years later, Martin Armstrong once again claims that Socrates was correct, using yet more of the endless set of ambiguous signals while at the same time trying to gaslight one of his Socrates users:

Re: Martin Armstrong Discussion June 05, 2020, 05:04:18 PM

Just for the record AnonymousCoder will always be remembered as the fool who sold gold against Socrates Yearly Bearish Reversal at the end of December 2015 at 1044.5 which was not elected, that’s like selling the Dow at the end of the year just above its yearly bearish at 15480.

not only did u trade against the yearly bearish reversal you also traded against the ECM Major Turning Point date 2015.75 which gold was crashing into only to rally up into the next ECM Major Turning Point date 2020.05.

the real question is how stupid can you be to actually make this trade?

 Saying that his clients who followed the advice that they they paid are stupid following that advice.
 

See also:

Socrates The Market Manipulator

Monthly Reversal Failures December 2018

Weekly Superposition Event in the DOW October 2018

Socrates Long Term Past Performance Review 

Socrates Subscriber Testimonials

 

For a wider view of Martin Armstrong's incorrect Gold calls including this one by another observer, see:

Martin Armstrong - Gold Bear?

and 

Martin Armstrong's gold crash didn't happen in September of 2015

 

For other types of Revision Signals, see:

Revision Signals
 

Revision Signals

Socrates generates signals labeled "Reversal" in hindsight.

In the scope of these critical writings, I call trading signals generated in hindsight "Revision Signals", because Martin Armstrong uses these special signals exclusively to create a revision of the truth, by re-writing the history of a situation that has already occurred. I also use the term here to avoid confusion with the term "Reversal", the term that Martin Armstrong uses for Revision Signals nevertheless. To make it clear from the start, these signals are fraudulent.

What a Reversal normally is, is defined in Martin Armstrong's documentation. Please see the links at the end of this page.

In short, it is a price value, that if the market crosses it, acts as a buy or sell signal. Sets of four Reversal values are generated at market highs and lows for future use. Therefore, these Reversals are planned, and I am using the term "planned Reversal" at times to make this distinction between them and Revision Signals.

Socrates generates Revision Signals in various scenarios, e.g. where a planned Reversal was elected and has already failed, meaning the market price after its election has moved in the opposite direction, and would have already created a trading loss if traded. There are multiple different scenarios.

In one scenario, it creates a signal called Superposition Event which is of the opposite direction of the failed Reversal.

In a different, more frequent scenario, Reversals are replaced by new ones in the next session while the old reversals are conveniently forgotten. This is a feature at the core of the trial and error nature of Reversal System. Read more at:

The Reversal System - Engineering Perspective


Unfortunately, some of these Revision Signals are also labeled "Reversal" in the Socrates reports, and Socrates uses (counts) them in the reports to enhance the track record of the system. As if they had been generated as planned Reversals which is not true.

A rather critical problem with Revision Signals is that the time that passes after planned Reversal failure until a Revision Signal is generated varies. This has the effect that a Revision Signal may lose whatever utility it may have had to exit a losing trade, losing due to Reversal failure, because it is too late.

Since Revision Signals are created in multiple different scenarios, these scenarios are documented in detail on separate pages.

However, an important feature of a Revision Signal is that it is fraudulent because it tricks the user or the person analyzing the system into believing that the system predicted a price movement where in fact the signal was generated after the price movement had already occurred. This confidence trick is facilitated by the practice of using the same term "Reversal" for entirely different things, creating confusion.

This confusion has lead to situations where Martin Armstrong's affiliates encouraged users to upgrade their Socrates subscription to the most expensive "Pro" level to view more detail about the reversals, and / or learn more about the system using Forecast Arrays, rather than admitting that the signals were generated in hindsight.

Unfortunately, the Socrates system prints other irrelevant "unconfirmed" or "what-if" reversal values that change going forward in time before becoming "confirmed" and fixed. I am not referring to these. Armstrong promoters / shills often use these unconfirmed reversals as a distraction by showing  that reversals are allowed to change over time.



How to Use the Reversal System

It is clear from the following statement in the instructions linked to above that Reversals must be created in advance:

"If you are actively trading a particular market, we suggest that you write down the Reversals ... from our reports in a vertical format."

Socrates misrepresents the occurrence of Reversals in computer reports.

His computer generates reports every day. These reports should be saved to create a record of past performance and to discuss issues such as the following. Here is an extract from one of the daily reports:

The current overall tone on the Daily level is reasonably Bullish for right now, electing three Daily Bullish Reversals suggesting a moderate move up on this time level with the last being elected yesterday suggesting at least a bounce.

This reporting is selective and therefore revisionist. It creates the illusion that one only needs to trade the Reversals to trade profitably. Because it never reports situations where reversals were elected but the market price moved in the opposite direction which happens more often than not. This trick of selective biased reporting is actively exploited in Martin Armstrong's official support forum, for example here:

Nasdaq Composite. Weekly Super-Position event (bearish).

Disagree, watch the reversals on the 1h chart and you’ll be amazed

The shill responds to critical comments that were - again - selectively deleted ("Comment removed by moderator"), in Martin Armstrong's true dictatorial revisionist style. Please note that even the title of the post indicates a Socrates failure, hence the need for a revisionist "Super-Position event" which is only generated after another Reversal failure.

Socrates emits signals called "Cycle Inversion" in hindsight.

These hindsight signals appear in the context of Forecast Arrays after the fact, when on a previously predicted turning point time target, the price curve dues not actually turn but continues to follow the current trend. In other words the turning point failed. A cycle inversion signal is never generated ahead of time, only after the fact. The effect is not even included in the user manual. Following is the relevant section from a printed Detailed Analysis report:

The last cyclical event was a low established back during May. Normally, this implies that the next turning point should be a reaction high. However, thus far, this market has already broken that previous low established at 126730. This strongly implies we are in a cycle inversion process, which tends to be rather bearish overall.

The signal is emitted clearly after the fact - an excuse for the failure of the turning point.

Examples of Revision Signals:

Quarterly Superposition Event in Gold 2015
Weekly Superposition Event in the DOW October 2018

Major failed Predictions

Up to The Mother of all Forecast Claims where you can explore even his legendary successful predictions that Martin Armstrong never made and other miracles.

 

The following predictions made by Martin Armstrong are major in a sense that they are aligned with the fundamental cycles of his models. They are clear enough to be verifiable. Their due dates are in the past, so checking the facts is easy.

China new Financial Capitol of the World by 2015.75

On October 15, 2010 Armstrong incorrectly predicted that China would become the new
Financial Capitol of the World by 2015. See Show Me the Money at page 6

China will take the torch as the new Financial Capitol of the World by 2015.75 and that is the ultimate irony. The nation that revolted against capitalism, embraced Marx, will become the center of capitalism because the West refuses to reform. The NY Bankers won't let reform happen and they are too busy lining their pockets. They are in reality burning down the house to find that dime they dropped somewhere.

Meanwhile, the US remains the world's largest economy by some $7.2trn. See: List of countries by GDP (nominal)

 

USD Rally, EUR/USD Collapse

As major theme, a permanent prediction for years, Martin Armstrong has been projecting that the Euro would collapse, and a USD rally would break the back of the monetary system. We have a report that Martin gave a live public interview in 2015 in Athens where he advised the audience to buy and hoard US Dollars. At that time the EUR/USD was trading at 1.08. Despite his calls on the USD would rise dramatically and his numerous blog posts with the images of the Euro sinking, five years later the EUR is trading at the high 1.21s.

Gold USD 5,000+ into 2016

In March 2011, Martin Armstrong published the following document that contain the failed prediction:
HOW & When

THE SPIKE HIGH: ... This would signal an amazing rally may then develop with a high at least at the 5,000 level and perhaps even 12,000 by 1215.75 if we held the 1,500 level in June..

In March 2012, at the peak of the Gold rally, the 30 year all-time high, Martin Armstrong published the following two documents that contain the failed prediction:

Will Gold reach $5,000 +?

P13: A 21 year bull market in stocks points to 2015 and a 17.2 year high in gold points to 2016.

P14: However, if gold exceeds this level and it too forms the subsequent support, now we are looking at the $3,500 to $5,000 target zone. This is where we see the potential for Gold is a true economic meltdown of Confidence.

GOLD $5,000 +

P13: Technical support will be at the $800 level for 2010. Holding this will keep the bullish momentum in place. We should see a temporary high in 2010-11 with a retest of support perhaps into 2012-13 with a rally into 2016.

Meanwhile, in March 2020, four years after the target date, the price of Gold is still below the all time high in 2012.

US Recession starting in October 2015

On April 26, 2013 Armstrong incorrectly predicted that starting from October 2015, the rise of the US Dollar would create a recession in the US economy via massive short covering. Back to the Future There has not been a recession in the US economy between October 2015 and July 2019. List of recessions in the United States

Sovereign Debt Default "Big Bang" in October 2015

See: 2015.75 ECM date was a big bummer for Armstrong
Eating his own dog food, he changed the definition of the "Big Bang" after the forecast failure.

Big Banks go bust starting in October 2015

On December 31, 2013 Armstrong incorrectly predicted that big banks will start to go bust after October 2015. What Kind of Trader is Trading In June 2019 no big banks went bankrupt since 2015.

Crude Oil Rally 2014 - 2017

On July 9, 2014 Armstrong incorrectly predicted that Crude Oil prices would rally into 2017 in line with his war model. His war model being driven this time by conflict in the Middle East. See: Brain-Dead Foreign Policy – Destabilizing the Middle East – Feeding the War Cycle

Regarding the price of oil, see: Crude Oil & The Future At the time of this prediction, the WTI Crude Oil futures price was USD102.93, and it declined to USD26.21 on February 11 2016, not exceeding USD60.42 on December 29, 2017 Crude Oil Prices - 70 Year Historical Chart

It is useful to consider Martin Armstrong's claims that his computer correlates everything. See The Global Correlation Model and It’s More than just a Debt Bubble – It’s a Social Bubble A recession would necessarily reduce oil consumption and produce an oil glut because oil consumption is positively correlated with economic activity. It is also unlikely that a war would break out over the control of oil resources during such a glut.

European Central Bank ECB failure in 2018

On June 30, 2017 Armstrong incorrectly predicted the collapse of the ECB in 2018.  ARMSTRONG: Major Central Bank May Fail Next Year.  In 2018, no European bank failure and no associated stock market rally as predicted.
 

European Financial, Political and Banking Chaos in 2019

On March 29, 2019 Armstrong incorrectly predicted Financial, Political & Banking Chaos in Europe Going into May. Financial, Political & Banking Chaos in Europe Going into May. In May 2019, the economy in Europe was unaffected by any form of chaos.

Swiss Franc Collapse Prediction in 2014

In this interview (the account of the interviewer Greg Hunter has been deleted by YouTube and the video is gone)  Martin Armstrong-Economic Downturn Will Take World to War at 5:40 Martin Armstrong tells us how he 1) consulted Swiss gov 2) told them the peg would collapse.
First, he never advised any government in his entire life. See: Which Government has asked Martin Armstrong for Advice?
In The Swiss for Year-End 2014 we read his call on the swiss franc where he predicted that chf would fall against the usd. Just two weeks later the franc soared 30%. And 2.5 years later it's still there where it was in the end of 2014.

 

Martin Armstrong's failed Real Estate Prediction (Link)

On a separate page. Please note that Real Estate is the biggest market in most countries, so this is significant. Once again this shows how he makes things up.
 

Prediction: Disease Cycle Peak in 2022

Martin Armstrong defines a rigid time machinery that his Disease Cycle has to align itself with. He predicted the peak of it for 2022, with a Panic Cycle. In The Disease Cycle Turned Up – Next Peak 2022 he writes on Jan 26, 2020:

There is a 13-year cycle in Influenza outbreaks. The last pandemic with respect to the strain of the Influenza was 2009. The next one of those to reach a possible level of a pandemic will be in 2022. This is where the largest death toll appears to be most likely. Keep in mind that the last deadly pandemic began in 1918 but it lasted for two years into 2020. Clearly, the worst year ahead appears to be 2022.

Nothing happened in 2022. But he keeps trying. At some point, like a broken clock is right twice a day, he might get lucky and his cult followers will claim for the next few hundred years that once there was that legendary forecaster ...

See also:

The Failed Emerging Markets Meltdown Prediction

The Martin Armstrong Lie Detector

 

 

 

 

 

 

Revision to Socrates report - Changes made post-event

As AnonymousCoder has discovered and documented below, subscription reports from Socrates often have revisions of bearish/bullish reversal that are posted after the turn of market.  This is obviously out-right cheating, since hindsight is always 20/20.  Telling the subscribers that the market has turned, only when the market already made the turn, but NOT beforehand, is truly useless "forecast", or should I say "hind"cast??

---- From AnonymousCoder ----

Socrates Weekly Reversal System fails, misses important Rally. Still Martin Armstrong claims Success.

In the Private Blog https://www.ask-socrates.com/Blog/Article/5d11792c1dd9531ae8f54b67 Martin Armstrong claims:

Gold & the Rally to $1432
Tuesday, 25 June 2019
By: Marty Armstrong
...
We have so far elected three Weekly Bullish Reversals from the last low ...
...

and in the report:

SOCRATES Detailed Analysis
THE IMMEDIATE ANALYTICAL STANCE AS OF THE CLOSE OF Mon. Jun. 24, 2019:
...
This market on the weekly level has been making new highs since the last low established 4 weeks ago, which is a turn to the upside for now. We did elect four Bullish Reversals which implies we have had a broad change in trend on this level.
...

So let us check that briefly:

From some time before the last low, generously counting, we move forward in time and track:

Closest Weekly published Bullish Reversals:

Date            Close Reversal   Comment
2019-05-10 128740  132590   Reversal too high to elect
2019-05-17 127570  131480   Reversal too high to elect
2019-05-24 128360  129100   Reversal too high to elect
2019-05-31 131110  131480   Reversal too high to elect
2019-06-07 134610  136270   Reversal too high to elect
2019-06-14 134450  134990   Reversal too high to elect
2019-06-21 140010  144370   Reversal too high to elect

This is evidence that not a single published Weekly Bullish Reversal was elected during this seven week rally. Unfortunately, Socrates pushed the Reversals higher and higher, out of reach.

The three reversals he claims in the blog, and the four reversals in the report are fake phantom reversals that cannot be traded because nobody can see them in time. They are created in hindsight, after the fact.

With this, we now have evidence that the use of phantom fake reversals, the claim of their election, is systemic fraud. The user is shown a track record of multiple profitable buy signals (election of Bullish Reversals following a positive trend) where in fact the system failed every time to create them.

These "Reversals" are generated and counted in hindsight, as designed, intentionally, coded by a computer programmer.

This is very important because the system does not provide any other history that shows its performance record.

Update May 2023

For years, I have avoided to refer more often to this effect which I still have all details of., with thousands of data points across different instruments, not only gold. I intended to research the Reversal System more rigorously which I finally did.

 

The shifting higher in value of Bullish Reversals out of reach of election is still a mystery to me. The latest explanation of a similar effect confirmed by others is that the system has filters that allow the operator to hide some reversals while showing others, opening a back door for market manipulation.

For Armstrong, the gold market plays a special role in this, and this example confirms my suspicion that he manipulated the gold market, especially gold mining shares, trading against his Socrates subscribers and blog followers. The suppression of the buy signals would have allowed him to cover his short positions under favorable conditions at the expense of his followers whom he fed bearish signals in his blog posts at the time.

For the full details of this episode, read more at:

Socrates The Market Manipulator

and

Quarterly Superposition Event in Gold 2015

The End of Bitcoin Currency, another failed forecast from Armstrong

Martin Armstrong wrote on Nov 26th, 2018 in

Bitcoin – The End of Cryptocurrencies?

A monthly closing below 2950 will confirm the long-term trend is turning down. A year-end closing below 4150 will point to a drop back to 775 area. It was a trading vehicle – not an investment class for the long-term.

Bitcoin instead rallied, with a closing price of 3747.39 at the end of 2018.

In his statements above, although Armstrong didn't give a target date for the drop back to the 775 area, one could expect that it should reach that 775 value in 2019.

This is a price forecast that he made based on a Bearish Reversal in hie Socrates Reversal System. That forecast is not negated by a turning point in his Forecast Arrays, otherwise he would not have made that forecast. So Socrates failed in this case.

If Armstrong expected that the drop to happen in 2, 5, or 10 years, he would have stated so.  Obviously, since our Sun eventually will become a Red Giant, and engulfs and scorch the entire Earth, NO indefinite time-frame is acceptable for ANY economic predictions, since an economy nor human would exist on Earth.  I assume that Martin Armstrong is a fairly intelligent man, and would understand that a "prediction" without any time frame is worthless.

Since he did NOT state a specific time frame in his sentence, based on the regular usage of English, year 2019 will be implied.  Otherwise, Armstrong would have stated that "a year-end closing below 4150 will point to a drop back to 775 area [within 2 years]" or something like like that.

So what happens so far in 2019, if you had shorted bitcoin following Armstrong's advice, on July 14th, 2019, bitcoin is trading at about $10400, almost 3X of the closing price of 2018.  If you shorted bitcoin, your loss would be a whopping negative 200%!!


See also:

Major failed Predictions
Monthly Reversal Failures December 2018
Martin Armstrong Financial Advice: Do not buy the Low!
Socrates Long Term Past Performance Review
Monthly Reversal Failures December 2018
Quarterly Superposition Event in Gold 2015

Prediction of ECM model for 2015.75

From the excellent work by trulycoined at bitcointalk.org such as in Re: Martin Armstrong Discussion where he argued with Martin Armstrong, we know that Martin Armstrong predicted in Back to the Future that

The dollar MUST rise for that will put the maximum amount of pressure on the global economy creating massive short-covering as even governments borrowed in dollars to reduce interest costs. This will be the straw that breaks the back of the economy turning the US economy into recession from 2015.75.

Never happened.

---

Article in Die Welt 3 May 2015.
US-Finanzprophet Armstrong sagt Ende des Euro voraus

Auf ein Datum für den Euro-Zerfall will er sich nicht festlegen, einen anderen Crash hingegen sagt er taggenau voraus: "Lassen Sie auf alle Fälle die Finger von Staatsanleihen. Die sind heillos überbewertet. Hier wird es zum großen Crash kommen. Mein Modell sagt den 1. Oktober voraus."

He does not want to commit himself to a date for the euro collapse, but he predicts another crash to the day: "In any case, stay away from government bonds. They are hopelessly overrated. There will be a big crash here. My model predicts October 1st."

Never happened.

---

Days later (7 may 2015), in that same Magazine Die Welt, Martin Armstrong makes another prediction for the same event, but with a different and far less specific date!
Es wird zu einem großen Crash kommen (There will be a big crash)

Die Welt: Was sagt Ihr Modell?
Armstrong: Der große Crash wird kommen. 2017 oder 2018.

Die Welt: What does your model say?
Armstrong: The big crash will come. 2017 or 2018.

Never happened.

Most importantly, this episode is another piece of incontrovertible evidence that Martin Armstrong's forecasts are worthless and fraudulent because they are part of his scheme to produce ambiguous statements that he can later cherry-pick from to make it appear that his model is infallible.

---

In another article that same vintage year (2015):
Martin Armstrong, consultor financiero independiente (content translated from Spanish)

A government debt crisis will begin in October this year (historically, none have survived) that will peak in 2017, and governments will be forced to be more aggressive with citizens to maintain their power, with more taxes. and suppressing as far as possible the right to vote.

Never happened and debt continues increasing (2019: c$244trn).

---

In this article from 29 Sep 2015, so literally on the day of his grand "big bang" forecast:

Is Martin Armstrong's debt crisis upon us?

Martin Armstrong is quoted as saying:

The fact that we have the stock markets crashing into the 2015.75 turning point rather than making a major high is indicative of the future we should expect to unfold

Never happened.

---

Armstrong's Ignorance on Perpetual Motion Machine?

Martin Armstrong in trying to defend himself about his own "new" ideas gave us an example from his personal life, encountering a "smart" person who tried to get his perpetual energy generator off the ground, and not wanting to take a $50 million offer for it.  Here is the story from his website (note the spelling mistake in the title):

Fake New & Silence Any New Achievement

In Tokyo, a man came to me with a magnetic engine. He wanted me to help him and take it public. He left me a scooter and told me to test it out. You plugged it in once and thereafter it self-generated power and did not need to be plugged in again. I was skeptical at first. I asked him why he was coming to me? He said he had been to all the top auto manufacturers and everyone wanted to buy it. He was offered $50 million and turned it down not because he wanted more, but because they wanted to shelve it so it would not see the light of day. That was another project they ensured was killed in my affair.

Honestly, I am personally astounded by how low Armstrong's knowledge in basic science is.  He, supposedly, the person who created some artificial intelligence program or Socrates that can predict all the financial markets in the entire world, simply doesn't understand the most basic law of conservation of energy from high school physics.  Well, yeah, according to his Martin Armstrong he did only have a high school degree, and NO college degrees, but that should have been enough education for him.  Maybe he didn't even pass any of the science classes?

Ideas on Perpetual Motion Machines have been long time coming, and according to Science Explained: The Physics of Perpetual Motion Machines, NONE of any perpetual motion machines are real so far.  And even if a 100% efficient machine can be built, NO energy can be extracted for use, or else the machine will lose energy and stop.  But Armstrong, a "great forecaster", cannot even understand something that is so basic.  Not only that, during the last 20+ years of his life, after the supposed "encounter" with this Japanese scooter man, he is UNABLE to come to this basic understanding of law of energy conservation (energy+mass, if you include nuclear reaction).  The scooter man said that his machine "self-generated power and did not need to be plugged in again".  And Armstrong believed what he said, and Armstrong HAS the scooter that the man left to him.

Honestly, such falsehood from Armstrong really requires no further explanation to expose him as a con artist.  I highly suspect that Armstrong made up the whole story.  Whether he made it up or not, it is BLATANTLY apparent that Armstrong has very little understanding of high school physics.

And I will be highly suspicious of anything "intelligent" that he may say, given his low level of basic scientific knowledge.


Finally, here is the most likely motivation for and line of thought of this story: He needed some hype to raise his statue to superhero status.

He usually does that by equating his own fake achievements with those of other trusted role models by using The Fan Email Confidence Trick while at the same time spinning yet another conspiracy theory to distract from the real cause of his past criminal conviction. Tried and tested.

COMMENT: Martin – I just watched the documentary called “Newman” on Amazon Prime, and the story made me think of you and your trials with the government. It is about an inventor who came up with the machine that outputs several times more energy than it takes as input. It could have solved a number of our energy issues but was squashed by the powers-that-be. The inventor died an angry, distrusting, bitter man.

See also:

Disinformation