Monday, October 10, 2011

10-11-2011 outlook

Germany and France have a plan to come up with a plan...  Guess if they had an actual plan the market would have been up 1000 points.  Hehehe  As I mentioned last week it appeared the longer swing cycles may be regaining dominance.  I'd say after today's (11.2TD and 22TD cycles up, 5.6 and 2.8TD cycles down) action we can assume that is the case. 

So here are the longer of the swing cycles   (SPX):

Note that the 34TD cycle is also up at this time.  I have upped my upside target to around 1215.  The 11.2TD cycle should top tomorrow, which should provide some restraint to push up once it tops, but the 22TD cycle has about 5-6 TDs before it tops (Oct 17-18?).  The 34TD cycle  will top around the same time.  So this should provide a mid-month top and then a drop into the end of the month.

And here are the shorter cycles  (SPX):

Gl traders.  I bought some QID and RWM today.  Probably early, so I bought half a position and will consider adding if we rise more (QID and RWM fall more).  Do your own analysis.


  1. Hi Inlet,

    I´m wondering if should be possible a post about the way you plot the cycles.

    I have the idea you look more to the top of the cycles than to the beggening (possibly I´m wrong…).

    Also need a clarification about when cycles should begin or rather, if when a cycle finishes before or after the day is supposed the reason you don´t move the mark and begin to consider a new cycle fron that new low. Seems one could be more flexible with “mid term cycles” as 22 or 34 days.

    For example I belive in what I call primary cycle that is between 15 to 21 weeks ( This guy do not explicit more shor cycles, and I´m trying to adapt his teory with yours but find that the place you plot the cycles are different, and I have the idea that when a Guinart primary cicle finishes, for example a 34 days cycle should coincide with that finish.

    Don´t know how to express better, sure you understand… remember English is not my lenguaje.



  2. Phil Davis wrote yesterday that the G20 Summit meeting is 11/3. This is just a few days prior to our November elections in the USA.

    Thus, a possible scenario is for the markets to crash the 2nd half of October as your cycles imply. Then, our G20 leaders meet and arrange the world's 1st coordinated quantitative easing on 11/3-4. Thus the "world is saved" and the markets rally just in time prior to the November elections.

    Guess we will find out eventually.

  3. Jekyll:

    1) Naturally I use visual examination to look for peaks and bottoms in identifying cycles.

    2) I use tools like CCI to also look for cycles (peaks usually correpond to cycle peaks, bottoms to cycle bottoms.

    3) I use channel envelopes to help highlight cycles

    4) I use MFI (top-bottom-top or bottom-top-bottom) in identifying cycles

    5) finally we know from authorities like Gann and Hurst that cycles generally conform to certain lengths. See prior posts:

    Hope this helps. There are many books on cycles so this is by no means complete.... If you know others who focus on the shorter swing cycles please share.

  4. DocTrader -

    I normally do not consider news events in looking at cycles until after I do my analysis. So yes, the things you outline confirm the likely future as projected by cycle analysis.

    I would point out by mid October we will have seen enough earnings outlooks to get a sense of the earnings season. My guess the outlooks will be more relevant than actual earnings numbers (and outlooks msy not be great). JMHO

  5. It helps a lot.

    I read some things about cycles, but you are one of a few blogs that follow the market that way.

    In Spain is Mr Guinart ( who follows different markets. But his philosophi is more long time focusing on 15-21 weeks cycles, and 18 moths and 3-4 years. He appeal to stochastic to confirmn his primary cycle bottom and comfirms the new with mma25 if the index is trading up, but I think you cannot swing trading with this.

    He has a book publisher some years ago that I could´t find

    I like more yours, and specially your commented system with CCI and MFI but I find a big problem don´t know how to solve. The signals, turning to cross teh overbougth/versold area are great but you lose a lot of trend swings giving wrong signls when there´s an strong trend.

    The problem to me with your way of trading is that is very subjective, specially in plotting cycles.

    I´m trying to learn...

  6. Jekyll -

    Agree that interpretation of the data is somewhat subjective. Determining when dominance switches from one set of cycles (say shorter cycles to longer cycles) is always problematic. Hopefully, I catch the change, but I won't always and will at times miss on my expectations.

    Still, I have found no system that is perfect. The best we can hope for is to gain an edge...

  7. Inlet I noticed the Nasdaq closed up .66...may not mean anything but anytime the 66 shows up as a close or open the next day is a huge move. Has something to do with the HFT so what do you have for Wed?

  8. c88 -

    That is a question for a numerologist. Not something I follow or necessarily know how to interpret. My Wed outlook does not forsee a large move.