Saturday, January 12, 2013

January 2013 update II

The placement of cycles is never exact or easy to do.  Sometimes it seems more an art than a science.  When evaluating the Kitchin, 1/3 Kitchin, Wall, quarter Wall, etc we know there should be sync of bottoms and tops.  Within the Kitchin cycle we have the 1/3  Kitchin putting in 3 bottoms and the 3rd bottom should sync with the Kitchin bottom. 

There are 9 Wall cycles in a Kitchin cycle, and 3 Wall cycles in a 1/3 Kitchin cycle, so the 3rd, 6th, and 9th Wall cycles sync with the 1/3 Kitchin cycle bottoms (these bottoms should be more pronounced).  The 9th bottom syncs with the Kitchin bottom.  Given this (all else being equal) we would expect the 9th Wall bottom (aligned with the 3rd 1/3 Kitchin bottom and and the Kitchin cycle bottom) to be the most pronounced downturn.

Expectations are not always fulfilled by reality.  The bottom in November should have been the Kitchin Cycle, 3rd 1/3 Kitchin Cycle and 9th Wall Cycle bottoms but was less robust to the downside than expected.  This led me to question if this was the actual Kitchin Cycle bottom.  Timewise it was already somewhat extended as early September whould have been 42 months from early March 2009 (now that was a bottom!!!).  Since then the market action/data seems to confirm the bottom in November was the Kitchin Cycle bottom.  Time will tell.

This interpretation leads to differing tops and bottoms placement in January.  Here are visuals of the cycles leading up to January:

Here are the shorter swing cycles:


Update Jan 16 - expect short 8+ day cycle today (close up last hour?):

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