Well, the mid September projected top held for 4 months and is still holding in the NDX. However there was very little price destruction and we are now making higher highs above the Sep top in most indexes. I'm thinking the market is setting up a double top analogous to the 2007 top. In other words the 9/14/12 top equates to the 7/16/07 top and the current rally equates to the final rally up into the 10/11/07 top. The window of 1/30/13 (plus or minus a couple trading days) appears to be the most likely timing for the conclusion of the second top in this double top analog hypothesis. If the market is rallying into that window, I will be highly alert for signs of reversal to re-establish long-term short positions. If the market is selling off into the time window above, I will likely stand aside and wait for the next timing confluence before considering short or long positions. Price projections aren't as clear as what my timing analysis appears to be, so I'll just wait and see where we're at as we enter the timing window. In 2007 the Oct top exceeded the July top by a little over 20 points. We've already done that. So if it keeps going up from here, exactly where it stops requires a better crystal ball than mine. FWIW, the price projections I do have are: 1496 area (done), 1523 area, 1551 area, and 1570 area. All of the latter three seem like too much ground to cover by the upcoming time confluence window, so this is strictly play it by ear. As usual, anything can and will happen - DYODD. Kimston
Stocks: Major Timing for Change of Trend
12 replies to this topic
Posted 30 January 2013 - 11:39 AM
As posted a couple times over the last week or two, 1/30 (+/- 2 trading days) was projected in my analysis as most likely timing for the top (after the mid Sep top failed to hold). I think today is the highest probability for a turn in this current confluence but I always have to allow a couple trading days either way. I began nibbling on shorts on the push to new highs this morning. I wouldn't be surprised to see a push over 14,000 on the Dow before we through this time window, but who knows. If it does or if it doesn't, I will likely add to shorts before today's close. If this current confluence is important, I would not expect to see significant price advance in the SPX above whatever the high is today or tomorrow. I saw that Peter Iliades had a very long term cycle turn date projected for 2/6/13, so I would keep that in mind as a possibility for a top as well. In my opinion, the biggest caveat that argues against this being a major top, on par with 2007, is all the price projections that line up with 1551 to 1556 basis E-mini SP nearby continuous futures. Just because there are numerous projections to that price area does't mean the market will get there, but it remains a decent probability. If it is going up there, it may be that we just get another shallow correction for a few weeks here and then continue to rally. My confidence in shorting this would be much higher if we do visit 1550s at some point. In any case, my timing analysis points to 2/25/13 area for a potential turn of some sort. At this point I'm guessing a low, but it could always turn out to be a high or nothing at all. I'll see what the market is doing as we head into that time before making a less ambiguous forecast. Kimston
Posted 30 January 2013 - 10:53 PM
On the first chart posted below, the long-term upper parallel channel line was hit yesterday/today. The same channel line drawn on the cash index has been exceeded a bit, but I prefer the continuous futures contract for accuracy of trend lines. The second chart shows the upper trend line of the rising wedge was also hit with precision. So far these trend lines have acted as resistance just as the important 1/30/13 timing was hit. I don't know if today's high in the market will hold, but I think there's a pretty good chance it might.