Wednesday, August 3, 2011

Comments and outlook for 08-04-2011

I told you late last week to expect more volatility.  I think you will agree that over the last 4 days we have gotten that.  This is typical as cycles make a final push to a bottom (or a top).  I was wondering how much bleed over we would get from yesterday's sell down and close near the lows.  It was considerable.  Still by the end of the day my long purchase yesterday was in the green and QID was below where I sold it.   My timing was not perfect (it seldom is), but I believe I cut back my short position at an acceptable level and increased my long exposure.

Expectations for the economic #s have been lowered enough that to beat or meet them should be no problem.  Today's ISM #s and ADP's employment #s were not good, but they did not result in continued sell down for the day.  So I do not expect much of a reaction to #s unless they are absolutely terrible over the next few days.  Of course, Europe could always blow up and that would definitely move the market down.

For tomorrow we have the 2.8TD cycle topping mid day, the 5.6TD cycle up, the 11.2TD cycle up and the 34TD cycle up (for about 3 weeks).  The 22TD cycle is down until around Aug 17.  If you have read the prior post and exchange between myself and Shadow you know there is some question about the exact status of the 20 week cycle.  I have it as down.  The 65-70TD cycle should also be down.

So I believe there is an upside bias, but given the position  of longer cycle (down) I would expect any move up to be moderate.  I think we will trade in a S&P range of  1247 to 1279 tomorrow and may end up by about 10 points on the S&P.

Here is a chart of the S&P (Note I shifted the cycles to the right by almost 1 day):

  GL traders.  Do your own analysis.  Be careful, any up move may be short term (5 or so days).


  1. Well I'm definitely off...need to recalc with adjusted WALL Cycle...

  2. Today's pattern is showing up as what I predicted for maybe I was off by a day...we'll see....if we don't keep going down tomorrow...we'll be good.

  3. total miss on my call so far today.

  4. Yeah me too....even the shifted date is now broken. So the 20WK has to be continuing this point I just have to watch.... If the 6 year peaks in September doesn't that mean there is a 3, 1.5, 3/4,3/8, 3/16 year cycle also?

  5. Wow that was there more to come? I bet mom and pop are going to run to try and get the $$$ out of their 401 K's and vow never to invest again.

  6. Hmmm....I'm on the fence to be honest. I thought we should be heading up by now (day later and not short enough)....I'll have to see what tomorrow brings.

  7. c88 - mom and pop should stick with a balanced portfolio of stocks, bonds, etc in which cases their profits on the bonds would have offset in part at least the losses on stocks.

    I got stopped out of some positions and took profits on an equal proportion of my QID holdings. Some pain today, but it was at least partially offset by my short (QID) holdings. Days like today is why I usually hold some short positions as a hedge. Bottom fishing is a painful (dangerous sport) experience if you miss judge where the bottom is.