Saturday, December 1, 2012

December 2012 outlook

Our outlook for November was a bit off the mark the last third or so the month as the market rallied more than expected.  Hard to anticipate what the market will do from day to day as the market is news driven out of Washington (nothing is getting done to resolve tax/budget issues).  But, I will give it my best effort....

The cycles should give us a bottom by the middle of the second week of December (December 12??).  Depending on the news any down move could be substantial.  So I would use trailing stops for any long positions to try and limit losses on any pullback.  By mid December we should see a move up into January.

Here is a visual of the longer cycles:

If the downside (see DPO) of these longer cycles is realized we could see a pullback of 200 or more S&P points.  With the foolishness going on in Washington - anything is possible.

Here is the shorter cycles:

These shorter cycles are projecting a pullback of about 72 points.  So we expect a low in December around December 12 and a high toward the end of the month.

GL, traders.  Cash out inverses over the next 5-7 trading days and go long is my basic strategy for the month of December.


  1. did US make a Kitchin triangle-low i 2011-2012?

  2. A Kitchin cycle is about 41-42 months normally. The last cycle low was March 2009. Forty two months is 3.5 years. March 2009 plus 3 years is March 2012 plus half a year is Sept 2012. David Knox Barker (expert on Wall/Kitchin cycles) says FED intervention will elongate the cycle. My assumption was 45 months with each 1/3 Kitchin being 15 months. If I am wrong and the kitchin is 48 months then we see a bottom in March 2014.

  3. have you noticed that the Kitchin cycle works better for highs than lows, which is an unusual cycle-behaviour...

  4. We need to be careful in makng those types of assumptions. March 2009 was a very significant bottom. Sometimes though the extent of a move up or down suprises. There may be other cycles offsetting a move that has not been considered.

  5. we are making some kind of top this winter. A 18-24 month oscillation should top here, most often followed by a 50/200MA death cross. It is now some 235 days with 50MA above 200MA in DOW. And Nasdaq is making a cross very soon (helped by Apple weakness). So the main indexes should make the cross either now soon, or a bit later this winter.
    Could just be the 18-24month top, or also a prolonged Kitchin top...(if 2011 wasnt the low) :)