Wednesday, May 18, 2011

comments and outlook for 05-19-2011

What can I say?  My expectations for today were completely off base.  Of course I have to sheepishly admit I did tell you in my outlook for the week the following:  "My expectations for the coming week is that the 22TD cycle (and other shorter cycles will bottom mid week - as early as Tue close, but more likely sometime Wed)."    I believe that is what happened - the market bottomed Tuesday.  I have stated in the past that turning points can be tricky to call exactly.

So, it is my opinion now we saw a low yesterday.  I could try and make the argument that today was an aberration, but that would be ignoring the evidence.  If I have learned one thing over the years - don't argue with the data in front of you - you will lose the argument.  Besides I am trying to interpret the data not dictate market movement.

Fortunately, I had anticipated this and had a chart all prepared (just had to plug in today's data):

I will try and expand the chart to better show some future dates and post it later.  GL traders.  Today was a perfect example of why you should consider using stops. Do your own analysis

Update 06:37 EDT  - It appears tomorrow should be up.  May get some pullback toward the end of the day.  Here is an expanded chart:


  1. The WALL Cycle should top with this 22TD top around June 1-3 correct?

  2. The Wall cycle may top a little before that, but yes that sounds about right. As you know the market is a fluid situation and we may need to tweak projections if the data suggests it.

  3. So basically there's not much to hold the market up after June get's here?

  4. Shadow - I believe that is generally true. We need to carefully monitor market action with this possibility in mind.

    The other factor I will be watching is the last 5 or so weeks of the 1 year cycle into early July. If you look at history it is usual for a downside move from mid-May to early June into early July due to this 1 year cycle bottoming in early July.

  5. Question regarding the 22TD cycle: Do all the sub divisions of the cycle always stay nested inside the 22TD? Can they get out of sync? Hope I'm saying that in a way that conveys my thoughts. Thanks, Best

  6. Cycles don't have to nest, but more often than not they do. For example - I don't believe the 1 year cycle is nested, but it may contain 6 month and/or 3 month cycles nested within it...

    Even the long cycles nest. The 120 year Grand Super cycle contains 2 x 60 year K-waves. A K-wave contains 2 x 30 year Super cycles. A 30 year Super cycle contains 3 X 10 year cycles.

    Frequently when you have a 22TD cycle you will also have a 45TD cycle... A Wall cycle is 20 weeks and 9 Wall cycles are contained in a Kitchin cycle. There are 17 Kitchin cycles in a K-Wave.....

    I believe I have talked about this nesting extensively in prior posts.