Saturday, April 16, 2011

Changing of the cycles?

By the end of the week my expectations were being frustrated by the market.  I was expecting some downside to the market, yet the market was going up.....  It seemed market action was not conforming to my interpretation of the data.  So I began to look more closely at the data.

Not a certainty yet (may take a couple of weeks to determine) but it appears that there may be a change occurring in what cycles are dominant.  It seems the 33TD cycle is decreasing in effect (less amplitude)  as a 22TD day cycle is getting stronger (greater amplitude).   If that proves to be the case them mid-week was a short term bottom and the market will be up the next two weeks.  This scenario better explains the market action after mid-week.  As I said it may take a couple of weeks to prove out.

Still I feel it probable enough to bring it to your attention.  Here is a visual:

Often when we see the 22TD cycle we also see a 45TD cycle.   That was the case last spring/summer.  In other words we see either the 33TD cycle or the 22TD and 45TD cycle (22 and 45 averages out at 33). 

Not enough evidence yet to form an opinion or conclusion on the 45TD cycle so that is purely speculation at this time.  Some cycle analysts stick to a set of cycles regardless of  what the data says.  They rationalize the data by claiming left or right translation or cycle expansion or contraction.  I try not to have a preconceived opinion and interpret the data in front of me.

If you have a different opinion or interpretation let's discuss it.

GL traders.  Do your own analysis.


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