first, an updated SPX chart with the expected time windows for the next 20 wk cycle low, the following 10 wk cycle low, and the expected 4.5 yr cycle nest of lows. we have to acknowledge that the time window for the 4.5 yr cycle runs from march to sept 07. 48 to 54 months from the march 03 low. to narrow that window we can sum the 3 expected nominal 18 month cycles that compose the 4.5 yr cycle. recent samples of that cycle have averaged slightly more than 17 months, that suggests an approximate 52 month 4.5 yr cycle bottoming in july. we also can arrive at that same time frame by summing the 20 wk cycles contained in this current and last "18" month cycle.
this chart also shows that the current 20 wk cycle, ideally due to bottom mid march, shows high right translation. this implies the sum of all larger cycles is to the upside. since both 4.5 yr and 18 month cycles are hard down into july, it is the combined uptrend of larger nominal 9 yr, 18 yr, and 36 yr cycles that is causing these right translated cycles and the new highs we've seen recently even though an expected 4.5 yr cycle low is near.
today's huge drop occurs as an expected minor 2.5 wk cycle bottom is due. there is nothing cyclicly IMO to account for the huge amplitude increase and i have to label it a cycle straddle caused by a non cyclic event. i would label this a straddle even if this was a drop into a 20 wk cycle low (ideally due in about 2.5 wks) that might be arriving early.
i noted on this chart that SPX has entered the upper part of the price projection window created by the break of the 20 wk fld, 1381 +/- 8 points. bought some es at 1395.50 overnight. will scale in more if any decline tomorrow into the mid 1380's. i expect a rally off this 2.5 wk low despite the amplitude jump.
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the next two charts are the INDU envelope and NYSE breadth system.
in one fell swoop INDU blew through it's lower 2% and 3% envelopes on it's way to cracking the lower 4% envelope (not shown). the NYSE 21 day breadth indicator dropped to a positve 236. if this indicator can remain at or above the 0 line over the next few days it will generate the most reliable and one of the strongest buy signals this system has. it will be important to watch. if the signal is given, i think we see a rally followed by a trading range as we move toward the 4.5 yr cycle low time window.
http://stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=0&mn=11&dy=0&i=p13265431465&r=690.png
http://stockcharts.com/c-sc/sc?s=$NYAD&p=D&yr=0&mn=11&dy=0&i=p73722408386&r=689.png
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