Tuesday, February 28, 2012

Mar 2012 outlook

It appears the longer 20 week Wall cycle should top Mar 1.  At the same time you have shorter cycles that have just bottomed .  So we start the month with offsetting cycles.  It will take a week or more for the 20 week Wall cycle to build down side momentum.  I suspect we continue sideways at least thru the first full week of March.  We will have to see if the 20 week Wall cycle has enough strenth to give us a bit of down side.  By mid-March we get cycles sychronized to the downside  (Ides of March).

Here is how I see the SPX going into March:

Gl.  More of the same?

Monday, February 27, 2012

March 2012 spiral dates


02-27-2012 week ahead

This year so far reminds one of the start of 2011 when QE2 and excess liquidity by the FED was supporting stock prices.  The Fed claims there is no QE3, yet through interbank loans with the ECB they are supporting QE1 by the ECB - so we are seeing similar stock reaction.  So it seems to me there is QE3 by proxy by the ECB.  And this week we get additional QE (LTRO) from the ECB.  As with the FED (QE2 was less effective than QE1) one would expect ECB QE2  to be less effective than ECB QE1.  QE is the symptom of a problem, not a solution. 

Lat week we saw a new high on Monday (SPX) and then again on Friday.  I speculated Monday may be a high but lacked confidence (felt it may be later in the week or early this week).  With all the ECB liquidity flooding the world it supports higher equity prices so any pullback at this time is apt to be limited.  Still the market is over due a correction and it appears tops are in.  Here is the SPX:

GL traders.  If you used trailing stops for your long positions you should have had a good run.  It may be time to protect some of those gains.

Thursday, February 23, 2012

02-23-2012 Is APPL ready to top?

AAPL has had a heck of  a run last 3 months.  Today was the investor conference.  No dividend announced.  Pretty ho-hum event.  So I looked at the chart:

Appears Money flow (MFI) has reversed to an outflow, cycles topping (channel upper cycle lines may have crossed - sell).  I suspect it is topping.

GL traders.

Tuesday, February 21, 2012

02-21-2012 update and comments

The 20 week cycle should top this week.  It may have topped today?  Let's see how tomorrow looks.  When it tops we will have the 22TD cycle and 20 week cycles down which should result in a pullback  of a few days.  Of course the 20 week cycle should give us a downside bias into early May.

Here are updated charts:

My plan is to buy RWM on any move up to $27 for a trade.  GL traders.

Thursday, February 16, 2012

02-17-2012 outlook and comments

I have tried to give you sufficient advance warning as to what I feel will be a top.  So far this week is playing out much as expected with the 22TD cycle having topped and the 20 week (Wall) cycle topping offsetting each other.

The question is how much more upside is left?  I looked at the 20 week DPO to try and come up with an answer.  It appears we may have  1-1.5 points of upside left for the SPX.  Of course, anytime you try to call a top (or bottom) getting it right requires some luck.  So 1360.44 or so appears to be the upside as projected by the 20 week DPO (amplitude). Here is a picture:

BTW - I understand Pretcher of Elliott Wave fame has a projected target of 1360.

I also show the CCI, and it has fallen below +100 which I use as a "sell" signal.  Over the past few days  and tonight I have shown you:
  • Cycles that appear to be topping
  • MFI that is headed down
  • CCI signaling sell
  • DPO projection nearly fulfilled
I am sure you have your own TA indicators (RSI, MACD, Stochs) you look at, but I try to add to the more commonly used TA indicators to supplement your analysis.

GL traders.

Tuesday, February 14, 2012

02-15-2012 outlook and comments

In order to top (and turn down) it seems common sense - money has to quit flowing into stocks and turn down.  Can you agree with that?  So what is the Money Flow for the SPX telling us?  Take a look:

I have tried to update/refine the SPX chart:

It appears to me the 22TD cycle has topped and the Wall cycle (20 week) is at/near a top.  I expect we could be into a pullback by the end of the week or early next week.  We will see.

GL traders

02-14-2012 outlook and comments

The week started out as expected.  The 22TD cycle trying to move down, but the 20 week (Wall) cycle still has  2-3 weeks of upside left.  Which will win?  Near term the shorter cycle may have more amplitude on a daily basis - so we may see some pullback.   I see some calling for a substantial pullback - and we may get that in time.  I suspect that it is just not yet.

A level to watch is 1336.  If we can break below that level then we could get a healthy correction.  Here is a picture (FIB fan):

 GL traders

Sunday, February 12, 2012

02-12-2012 outlook and comments

So far this year there has not been a lot to comment on when it comes to "swing trading" as the market powered upward. Of course, no market goes in one direction forever.  It appears that at this time the market is at or approaching a top.  Looking at the longer of the cycles I follow (the 20 week Wall Cycle) it appears it should top within about two weeks.

If we look at the Wall cycles in sets of 3 (since the 2009 bottom) we see that cycles 1, 4, 7 start an uptrend after substantial pullbacks.  Cycles 2, 5, 8 continue the upside that began with cycles 1, 4, 7  after a minimal pullback.  Cycles 3, 6, 9 (??) see  a substantial pullback. 

We are now in cycle 8 which is pushing upward and is expected to top  around Feb 23.  After which a pullback is expected over about 8-10 weeks into May.  If past patterns hold this pullback will be 5-10% or so (not a major correction).

Here is my interpretation of the Wall cycles:

So it is about time to take some money off the table if you are long and/or hedge long positions if you decide to hold them.

Shorter term it appears we have a 22TD cycle that topped this week and will be down the next weeks moving counter to the Wall cycle.  This should limit the upside from the Wall Cycle as we get a topping formation.  I do not expect much (if any) upside from here.  Here is my interpretation of this 22TD cycle:

My conclusion is: 1) take some money off the table (trim your longs?),  2) tighten your stops on positions you choose to continue to hold, 3) do some hedging (IE sell out of the money calls?).  GL traders

Update:  although not in exact agreement my analysis seems to align closely to Cliff Droke's latest comments: 

"The nearest weekly Kress cycle of intermediate-term consequence is scheduled to peak next Friday, Feb. 17 (plus or minus). A second interim weekly cycle will peak around March 9. There is a greater than average chance that one of these two cycles could put a significant peak on the market, though we won't know for sure which of the two dates is most likely to be the interim high until closer to the cycle peaks."


Thursday, February 9, 2012

02-10-2012 Cycles and PEs

Can PEs go lower?  They have seen single digits in the past during times of economic stress.  Here is the history of PEs (and their cycles):

GL traders

Tuesday, February 7, 2012

02-08 seasonal trends

What to expect the next couple of months from seasonal trends:

GL traders