Monday, July 4, 2011

Comments and outlook for 07-05-2011

This past week is probably the worst week I have had since I started my blog when it comes to getting it right.  So what has changed?  What am I missing?  These are the questions I have been asking myself.

So I have looked at the placement of the 20 week cycle and adjusted its placement.  Not sure of the placement still.  That alone though should not account for the action we saw this past week. I expected the 22TD cycle to top on Thursday (but given it is probably actually 22.5TDs Friday was possible).  The 22TD cycle alone should not account for the amount of rise we saw in the market as we should have had at least some downside pressure from the 1 year cycle as it should bottom this week.

So I ran through several different possibilities, and may have found a possible answer.  Based on prior assumptions the chart would look like this: 

But this does not explain a move up that was extraordinary and one has to look back several years to find a comparable movement in a single week.  You have the 22TD cycle up, the 11.2TD cycle down.  These two cycles would be expected to offset.  So we would expect up/down movement based of the 5.6TD and 2.8TD cycles.  Instead we went up with little or no pullback all week.

So I cane up with a theory that may explain the data as it exists.  What if the 11.2TD cycle shifted 5.6 days so that it and the 22TD cycle were both up last week?  Many cycle analysts refer to this as a cycle inversion.    Then you would have something like this: 

You have the 22TD cycle up (it has 70 points or so of amplitude or 35 points last week) and the 11.2TD cycle up  and it has as much as 50 points of amplitude.  This gives you the potential of 85 points upside last week,  So the fact we got 75 or so points to the upside is accounted for and allows some downside for the 1 year cycle.  As I said - as of now this is a theory that seems to fit what happened last week.  Time will tell if it is the right theory.  If it is right then we now have both the 22TD cycle and 11.2TD cycles down and we should see downside in the coming week starting tomorrow.  It may start with a minor pullback (say 10 points or so on the S&P) and should accelerate through the next 4 days into next Monday if my theory is correct. 

If you have a theory (on cycles) that explains last week's action as well as this or better I would very much like for you to share it.

GL traders.  Do your own analysis.  Feel free to share you ideas and thoughts with others who visit this humble blog. 


  1. Like you said, time will tell. I wondered the possibility of the 1 year cycle having bottomed a week early and the 22 td cycle fading with the 33 td re-emerging...

    Yep, time will tell. Thanks.

  2. Best - I believe your comment on the 33TD cycle is spot on.