Amazing if it continues. Updated seasonal map

The DOW has now been down 7 of the last 10 July expiration Fridays.
In 2002 the DOW was down 390 points!
Note that 2002 was also the 2nd presidential year, a weak one typically.
Note also that the AAII reading made it's lowest low in years in that summer but saw a triple bottom before the tax cuts and interest rate incentives, etc. jump started the multi year rally. People were flipping houses and using their homes as ATM cash machines!
The AAII also made another low in the summer of 2006 (another 2nd presidential year) but that signaled the bottom in a fantastic final blow-off of the housing bubble.
Now we face the opposite economic circumstances.
AAII CHART

Today's big downdraft seems to be foreshadowed in Mike Burk's chart as you can see that steep drop in mid July.

Remember that this will once again diverge at some point, maybe even invert as it seemed to do early on in January.
But I could imagine the rest of the summer playing out as outlined.

Edited by Rogerdodger, 17 July 2010 - 12:54 AM.

The DOW has now been down 7 of the last 10 July expiration Fridays.
In 2002 the DOW was down 390 points!
Note that 2002 was also the 2nd presidential year, a weak one typically.
Note also that the AAII reading made it's lowest low in years in that summer but saw a triple bottom before the tax cuts and interest rate incentives, etc. jump started the multi year rally. People were flipping houses and using their homes as ATM cash machines!
The AAII also made another low in the summer of 2006 (another 2nd presidential year) but that signaled the bottom in a fantastic final blow-off of the housing bubble.
Now we face the opposite economic circumstances.
AAII CHART

Today's big downdraft seems to be foreshadowed in Mike Burk's chart as you can see that steep drop in mid July.

Remember that this will once again diverge at some point, maybe even invert as it seemed to do early on in January.
But I could imagine the rest of the summer playing out as outlined.

Thx for the continual update of this saga relative to the chart. Keep it coming.

The DOW has now been down 7 of the last 10 July expiration Fridays.
In 2002 the DOW was down 390 points!
Note that 2002 was also the 2nd presidential year, a weak one typically.
Note also that the AAII reading made it's lowest low in years in that summer but saw a triple bottom before the tax cuts and interest rate incentives, etc. jump started the multi year rally. People were flipping houses and using their homes as ATM cash machines!
The AAII also made another low in the summer of 2006 (another 2nd presidential year) but that signaled the bottom in a fantastic final blow-off of the housing bubble.
Now we face the opposite economic circumstances.
AAII CHART

Today's big downdraft seems to be foreshadowed in Mike Burk's chart as you can see that steep drop in mid July.

Remember that this will once again diverge at some point, maybe even invert as it seemed to do early on in January.
But I could imagine the rest of the summer playing out as outlined.

Thx for the continual update of this saga relative to the chart. Keep it coming.

SY HARDING, brings that up here !!!!!
http://www.streetsma....com/comm4.html

Whether it is presidential 2nd year or not, the second half of July has always been weak and this year we have also a trading cycle lining up I posted above.

Whether it is presidential 2nd year or not, the second half of July has always been weak and this year we have also a trading cycle lining up I posted above.

Thanks Arbman.
Your cycle work is always appreciated.
In case the rest of you don't know it, Arbman is a computer wiz working on that first $BILLION, emulating James Simmons.
(Although I think it will be Arbman's son who cracks that first billion.)

That 5+ TRIN at Friday's close would be the bottom in a bull market.
In a bearish environment it's just everybody trying to get through the keyhole at once.

The bearishness in the last week or two got many out of the market I suspect, but then everybody saw that AAII 27% ratio and figured they were safe buying and the ratio returned to 51%.
Thursday's weak opening with horrific economic news no doubt inspired new bears to short (and plan a picnic) but that final "surprise" push up no doubt cleared out those new bears stops, allowing Friday to fall without any shorts left to cover.

Edited by Rogerdodger, 17 July 2010 - 09:50 AM.

Good morning, Roger.

Just a thought.
I have keyed spx price to the last two turns which yeilds:

IF it holds...I see a lower high but also a higher low 1040ish?

Daily stuff is fairly decisevely down (obviously.) Will take a whipsaw up for it to happen, which the NYSI certainally will pemit. I mostly live inside the 60 which is looking up.

Some more bear food for the seasonal and Bradley as the leading indicator ECRI points to double dip. I guess that's what the market and Ben is worried about..
http://www.moneyandm...h-outlook-39632

Thanks for the compliment, Roger...