Friday, November 26, 2010

11-27 cycles updated for December

On Nov 13 I told you:

"As a dominant cycle reaches a top it exerts less effect as it starts to flatten out before turning down. This means less influence on the direction of the market. It also implies that the shorter cycles should exert more influence and a larger effect on market movement. So instead of day after day after day of the market moving up with a rare down day thrown in you get fewer up days and more down days. This makes for a better short term trading environment, but it also makes timing moves trickier. You get increased volatility both up and down.

As the topping process progresses you start to get more down days than up days. Just realize though the topping process for a longer cycles can be several days (2-3 weeks or more). In other words longer cycles have a longer turn radius than short cycles so we should not expect a sharp sell off the day after a long cycle tops, but a slow start that gains downside momentum over time."    Check.

Last week end I told you:

"So I expect the first part of the week to show some weakness (maybe test the 1173 area) and then a Thanksgiving rally to start. In other words the week should be choppy with little movement by the end of the week."    Check.

Mid week I told you:

"There may be a chance for a short term trade on the long side if we have the market opening down tomorrow morning. I view it as a fairly high risk trade and suggest if you take the trade you be careful and don't get greedy....."   Check.

I know, what am I going to do for you now!!!  I'll give it my best shot.  I believe we are in a confirmed down trend and next week will be choppy as we have one shorter cycle topping and 2 bottoming.    When the week is over I expect the week to be lower by Friday's close than the close this week (with a better than 50% chance we break below the recent 1173 lows during the week). 

I also wanted to give you a longer view for the month of December.  The market will remain choppy with a downward bias the first 2 weeks of December.  The cycles align to the downside and we could get a more substantial sell down the second half of December.  The "selloff" that stole Christmas?

Here is the SPY (with my December projections):


  1. excellent post and exactly the way I like your cycles explained to the public...How does Kress's 4, 8, 40 , 60 year cycles all bottoming in 2014 play into your theory

  2. Thanks Kli - form you that means a lot. I stick to the TA and trust you to keep me up to date on the rest.

    As to the Kress cycles I have done some research on them. I understand there may be a 120 year cycle bottoming then as well. My understanding is 2014 may be the "mother" of all bottoms. I am sure between now and then we will see warnings. I expect the cabal can keep the music playing a while longer, but not without some difficulties.

    So for the time being I am focused on some shorter dominant cycles. I am currently agnostic regarding 2014. We have 10 year, 3.39 year and 2 year cycles bottoming over the next several months. If this proves to be correct then 2011-12 may be the tune up for 2014.

    Over the next 12 months I expect to purchase 10 acres more or less to provide land to grow a large portion of my food. Also, I have been researching DIY solar panels at about 1/4-1/3 of the current retail price. I have also been researching the possibility of a "personal" wind generation system. All this is in preparation for living off the grid - which I fear may be required as we have to become self sufficient.

    As you drive down I-85 and see that log home with solar panels and a wind gerneration system - that will be me. ;) OK, it may not be visible from I-85.