01-08 the week ahead

The top of the 1 year cycle is getting close.  The high last year was Jan 19, so in a perfect world Jan 19 would be the top this year.  Of course, the world is not perfect.  There is a cluster of dates derived from different sources (Bradley, Gann, Fib) falling on Jan 14-16 so the top may be Friday (Jan 14) or Monday (Jan 17).  So be on alert for a top next week torward the end of the week.

It appears the 20 week cycle should bottom Monday and the 34td (trading day) cycle on Friday.  The 22td day cycle should be up.  So during the week we have the 20 week cycle up, the 22td cycle up  and the 1 year cycle up.  So this should give us an upward bias for the week.  It would not surprise if the S&P set a new high above 1280.  So sell the pop (if we get one) as it could be the top for a while.  At the very least move your trailing stops up on any pop.

We got a weak CCI sell Friday, but I don't trust it at this point and would wait and rely on trailing stops.  If we are truly approaching an intermediate top we should get confirmnation of the CCI sell soon.  I expect a top  around 1285  (say 75%) and the possibility of a low around 1255 (say 25% possibility).

Here is the S&P chart:

GL traders, be careful and if warranted take profits.  It may be time to look at stocks that have chart patterns suitable for shorting (or buying puts) or time to consider a short ETF.   I will try to feature some such stocks this coming week.  As always do your own DD. 

01/09 - 11:00 am update

http://www.safehaven.com/article/19583/global-stock-market-cycle-forecast-2011

The smaller stock market cycles, specifically the Quarter Wall and Wall #4, is overbought and topping out. A sizeable correction is in store, likely into late January to mid-February, which will produce the bottom of Wall cycle #4. Out of this low Wall #5 has a chance to rally to new highs, because it is the second Wall cycle in the unfolding set of three. The second Wall cycle in a set typically rallies to a new high. The high of Wall #5 is expected around the May target, whether it is a new price high or not. That will likely be the final high in this final business cycle of the long wave. A rally to a new high in Wall #6 will be a run against the clock of the ticking global long wave debt bomb. When it goes off, it will drive the global stock market cycles down

Update 2 - Monday:

GL