Wednesday, December 14, 2011

12-15-2011 outlook

Another day, another miss.  The market is now considerably below where one would expect based on the 40TD DPO (amplitude).  Took a look at the 20TD DPO and it is around 86 points (over 10 days up or down that is about 8.6 points a day).  The DPO for the 40TD works out to about 5.7 points a day.  So on average the 20TD cycle is about 3 points stronger to the downside than the 40TD cycle is to the upside.

At the beginning the week we were above where the DPO suggested for the 40TD cycle.  So we have corrected that, the 9 points (3 days at 3 points a day) that the 20TD DPO exceeded the 40TD cycle DPO and then some.  We are now at a deficit as to what is expected.  This should provide some fuel for a pop over the next 2-3 days.  We'll see.

Tomorrow the 40TD cycle is up and the 20TD cycle is down - slight downside bias.  The 10TD cycle has turned down, the 5TD cycle and 2.5TD cycles turned up.  This should provide an upside bias.  It is possible we get a break in the sell down tomorrow. 

Here is my interpretation of the SPX swing cycles:

Gl traders.  Let's see what tomorrow brings.

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