3 replies to this topic

[arbman]

We had the last 4 year cycle low in summer of 2006. We had the next 62 wk cycle around the summer of 2007, then another 66 wk cycle (slower) around Nov 2008 and then the last one was in February of 2010 as 63 wk cycle (faster).

There are 4 years x 52 weeks = 208 weeks in a nominal 4 year cycle and there has been about 3 x 62-66 wk cycles in them. In other words, we probably also saw the 4 year cycle in February. There is only upside in spring in my opinion.

I just cannot find any reason to be overly bearish at this juncture. The last 64 wk cycle that topped very early was from August of 2007, after 45 short sessions and basically declined for about a year (57 wks). if we are going to repeat the same stunningly bad performance, this trend should top within 3 days!

IMHO HOWEVER THIS IS IMPOSSIBLE. WHY?

We do not even have the 200 dma turned down yet, in 2007 it was already ready to decline and it had several penetrations below it by Oct 2007 top. The market needs to drop below 1050 within a month to reverse the 400 dma which will also turn back up by the end of April. This market is still accelerating up at the moment, although slower and slower.

So, sharp pull backs aside, we should see higher at least until May in my opinion, only then we should start seeing real signs of cracks and a turn, but this will be still quite early only 1/5th of the 64 wk cycle. We are talking about a lot of volatility building up ahead of it similar to 2007...

Hence, I tend to think it will be a few more weeks of clear uptrend and then a few more weeks of choppy period in May-June, then a resolution should come in July around 1/3rd of the 64 week cycle, still very early...

Best of luck.

[Islander]

Thanks, interesting. But I am concerned that cycles may be blind to some events.

this is a news driven market at times.

If the current health legislation is enacted the market may buck and react for a time.

This bill is a major impact on corporate earnings which drive prices.

Such exogenous political events often off-set cycles.

Best, Islander.

Edited by Islander, 19 March 2010 - 05:41 PM.

[arbman]

Thanks, interesting. But I am concerned that cycles may be blind to some events.

this is a news driven market at times.

If the current health legislation is enacted the market may buck and react for a time.

This bill is a major impact on corporate earnings which drive prices.

Such exogenous political events often off-set cycles.

Best, Islander.

The market knew about this over a year, I am having hard time in comprehending how this can be a complete shocker. Yes, it can be an excuse to sell here and there.

There are more than one cycle lows lining up over the next few days, but then I doubt it will turn the trend yet. I am not suggesting buying blindly every dip, but I think selling the rallies may be a lot more harmful than buying the dips for a several more weeks at the moment.

One should pay attention to the volatility range, it is likely to become more volatile than not, however the bullishness did not really yet reach to Nirvana. The next sell off early next week will prove my point probably...

I step aside when I cannot figure it out, the odds for lower prices for the next few sessions is still high, but then it looks up in the following several weeks...

Very best...

Edited by arbman, 19 March 2010 - 06:51 PM.

[arbman]

This was my most bullish outlook in December,

then I had to come up with a more reasonable prediction in January [LINK], yet I wasn't bullish enough. In both of these, you can now tell that the underlying trends are steeper, I don't have convincing reasons to believe that it simply died.

Is this a severely left translated cycle? Possibly... It is too steep and feels like a mark up, or perhaps you may say too good to be true. Indeed... The US stock markets are catching more wind because the rest of the world is not doing much better. But is it done? So far the trends are all looking up... I would not confuse the increasing volatility with a down trend yet, the down trends happen much later than the increasing volatility...