Friday, May 27, 2011

comments and outlook for week of 05-31-2011

Strange week.  Started out like we might have a serious sell off and spent the next 4 days recouping most of the first day's loss.   It doesn't feel like it but we have had 4 down  weeks on the S & P 500 in May.  This week it lost about 2 points for the week.  On average it has lost about .5% a week (7-8 pts) in May.Feels like the market has gone nowhere in May (and with all the moves down and up - it hasn't moved much) - a little over 2% for the month.

My task is to try and interpret the data and inform you as best as I can what to expect in the coming week(s).  An interesting development this week.  It appears the 22TD cycle may have faded out of the picture and the 34TD cycle is back.  It will take a couple of weeks to be surer of this, but for now that is how the data (and charts) appear.  Not unusual for a cycle to fade after 3-4 complete cycles, but the 22TD cycle may be fading out after just 2 complete cycles.  We will see.

Now I often have an opinion on how the market will behave based on what I believe are the prevalent cycles.  If the data changes I try and change that opinion. If the 34TD cycle is indeed back it will not top for a couple of weeks (mid June).  So that 2% we lost in May could well be recouped by this cycle in the first half of June (1360 S & P?).  This changes my view of June as I had previously expected it to be mostly down.

Longer term though it still appears we have a nesting of cycle lows in early to mid July.  So maybe we get one more move up toward the peaks and then down hard into July.  That seems to be the indications from the current data and cycle positioning.  

Here is a visual:

GL traders.  Do your own analysis.


  1. Thanks for the post on the 34TD cycle. I wondered about it again this week and ditched my inverse Thurs in a/h. So far, the right move. Time will tell. Thanks again.

  2. Best - you will see some talking about a 14 week cycle (~70TD or 2 X 34 TD cycle). I believe they may be looking at the same thing as I am, but interpreting the data a little differently. Just a thought.