Saturday, December 4, 2010

12-05 weekly cycle update

The strength of the up move Wed-Fri was surprising.  It should continue thru next week until we get the 22 day and then 34 day cycle topping.  I anticipate we will get new highs.  I do not expect the market to contine up as strong as it did Wed-Fri of last week.

Decide for yourself - here is a chart of the SPY:


Something I found interesting ( http://www.safehaven.com/article/19203/stock-market-cycles-virtuous-circles-and-trillions-of-dollars ):

>>The real question here is whether the Federal Reserve should just focus on prices, or possibly only enforcing bank regulation, especially higher capital requirements, reasonable down payments, and no liar loans. Business cycles and stock market cycles are natural events that serve to reallocate capital and separate the winners from the losers. The Federal Reserve should not be messing with Mother Nature.

How should this knowledge of cycles running longer affect the decision making of investors and traders? Long Wave Dynamics has discovered the natural lengths of stock market cycles. Research is producing actionable information for investors and traders on market cycles in price and time. The long wave contains sixteen business cycles. Every business cycle (aka Kitchin cycle) contains nine Wall cycles (aka 20-Week cycle). Cycles are rarely their natural or "ideal" lengths, like market prices they are guided by Fibonacci ratios. Cycles running longer than their natural lengths are to be expected as long as central bankers are pursing virtuous circles. Tracking the Wall cycle and the Fibonacci ratio targets to tops and bottoms is essential for all serious investors and traders.<<

So 9 cycles of 20 weeks is 180 weeks.  That is 3.46 years (180 / 52) or fairly close to 3.39 years that I have discussed. A smidge closer if we consider that 7 x 52 is just 364 days per year.

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