no buy sig yet on INDU envelope/ NYSE breadth method.
cycles suggest the nominal 20 wk low is in and since that cycle is part of the 4.5 yr harmonic nest of cycle lows IMO the bottom is here. it could chop a bit so i plan to scale into an intermediate long position on dips if we get em. not worried about getting close to the bottom tick, this is a 4.5 yr cycle low so plenty of points to be made on the upside.
last august i posted a chart on the SMH and explained how the semi's and some other high tech stocks did not always show a close commonality with the broad market's current cycle phasing. there seemed to be a 22 to 24 month cycle showing in the limited history of the SOX/SMH and i posted that last july 06 may have been an important 22/24 month low for that sector. that met with some disagreement but looking back since then i think it's proven itself. july 06 was the low, despite whatever the fundamentals were and the lack of volume as SOX/SMH moved off that july low. that 22 to 24 month cycle subdivides into a 11 to 12 month cycle, and as we were heading into the forecasted 4.5 yr low of late july i had no idea how that 11/12 month semi/tech cycle would play out, a june 11 month low or a july 12 month low that would coincide with the 4.5 yr low. in hindsight it appears that cycle bottomed in june, and the strength of the semis and some other tech stocks such as IBM that helped move averages to new highs in july was the result of that cycle. we are approx 8 wks along on that cycle and as the 4.5yr nest of cycle lows bottoms and turns up along with that semi/tech cycle's upside the tech sector may be a leading sector on the upside. i'd be more certain on that forecast but i can't be due to the limited amount of historical data for the sectors and stocks involved to see how consistent that cycle has been. there are not enough historical samples. i believe it will play out that way.
monthly SMH with 22/24 month cycle and 11/12 month cycle
