Liv-ex 100 started to plunge again after a moment of steadiness at around February to March this year. The index has dropped 23.7% from historical highest of 364.69 to 278.28 (May-2012), while S&P 500 gained 3.4%.
A quick simple forecast using the moving averages
Looking back again at the 2008 drop caused by the Financial crisis, a total of 22.4% disappeared with a sharp plunge. The three moving averages (3 month, 10 month and 20 month) took almost a year (from the year minimum) to settle and cluster before the north direction was securely set again.
Not as sharp as the 2008 drop, the current 23.7% plunge showed no sign of reaching its minimum yet. However, giving the period minimum at Nov-2011, a brief forecast maybe generated. Though a further 4% decrease in index in the most recent month causes a certain level of uncertainty, but the 60 month moving average is climbing to provide good supports to the index. Therefore, with an extra 6 months to 1 year (compare to the last steady period), it is estimated that the index should reach its stability in 1.5 - 2 years time (i.e. June-2013 to Jan-2014).
(This brief analysis is solely based on the moving averages of Liv-ex index - original data from Liv-ex.com, cnyes.com.tw - for personal use only)
