April 22, 2015 Bloomberg Brief Technical Strategies 5

TREND TERMINATION GUEST COMMENTARY BY S. KRIS KAUFMAN, PARALLAX FINANCIAL RESEARCH.

Major End-of-Trend Signals Detected in Crude, U.S. Dollar, and U.S. Transport StocksThe crude oil, U.S. Dollar, and U.S.

transport stock markets are exhibitingnotable trend terminations (called“Extensions”) according to ExtremeHurst™.

Parallax Financial Research derivedExtremeHurst™ from critical failurephysics that detects characteristic signsof discrete scale invariance occurring atthe beginning and end of trends. It isavailable for terminal users at APPS

and EHURST <GO> APPS CS:PFR. The trend signals linger for about<GO>

as long as they take to form, so monthlyand quarterly scale signals that takeyears to build can have a major impact foryears to come.

Figure 1 shows a current monthly scaletrend termination on the crude oil spotchart (USCRWTIC Index), as well assome historical signals. Extensions markthe end of a trend, but they do notnecessarily precede a large retracement. Markets may just move sidewaysfollowing a signal. We expect crude tomove sideways or retrace over the nextyear.

The next major signal is on the U.S.dollar (DXY Curncy).  Figure 2 shows amonthly scale top extension. Based onthis signal, the dollar is expected to movesideways or retrace over the next year.

The largest signal is on the S&P 500Transportation Index (S5TRAN Index). Figure 3 shows a top extension signal ona quarterly scale.  Prices are forecast tomove sideways to down for five or moreyears.  To confirm this forecast we ranour Price Wizard™ neural net equityvaluation model on the index.  It isavailable to terminal users at APPS

. Price WizardPRICEWIZ <GO>estimated the price of each constituentstock in the index, and then using our“Aggregate Valuation” option,  found themedian valuation of the transport stocksto be 23.7 percent overvalued as of April10.  This confirms our overall negativeoutlook.

—S. Kris Kaufman, CEO, financialscientist, and Bloomberg application

developer at Parallax Financial Research,Inc. of Redmond, WA. www.pfr.com He

can be contacted at kkaufman29@Bloomberg.net

Source: Parallax Financial Research

Source: Parallax Financial Research

Source: Parallax Financial Research                                      

Please contact S. Kris Kaufman for copies of these charts.