Friday, July 11, 2014

July 14, 2014 weekly outlook

The week ahead:

- short term 10TD cycle should bottom  along with 20TD cycle mid week (WED +/- 1 day.  Probably no more than 1% downside over next 2-3 days.

Warren Buffett's favorite measure of over valuation is when the value of the total market index exceeds the GDP.  We have reached that level, so maybe just a matter of  when the market corrects?

GL traders

Update 07/16:

Update 7/17:

July 20 is this Sunday which means if the 2009 bull market top wasn't already seen on 7/3/14 then it should be expected this week.


  1. Hello, I love your blog. Great job!

    I am new to cycles and would like to know more. I use Thinkorswim. How do you determine the length of cycles you draw? What does "TDs" stand for, trading days?


    1. John - there are cycle lengths that have been identified that normally occur. Shorter cycles are usually 10-12 TDs (Trading Days); 22-24 TDs (often called the lunar cycle); 2 months; 4.5 months (100 TDs or 20 weeks). Longer cycles are generally of interest to investors. Shorter cycles are generally of interest to day traders....

  2. Congratulations for this great analysis and approach. I discovered your blog a week ago and your work inspired me to order the book on Kress cycles. Maybe I am wrong, but I think I noticed that your cycles do not follow exactly the cycle calendar in that book. For example, your cycles bottomed on 4 April (important exact top) while the bottom in April according to the book is a few later. Again, I might be wrong, your weekly and monthly cycles are not exactly the same with those in the book. I would appreciate your comments. Please keep the wonderful job going on.
    Best regards,

  3. Palobar - I feel the cycles used by most followers off cycles are guide lines. I try to use those guidelines and then interpret data based on those guidelines. Sometimes there will be some variation from commonly accepted cycle lengths. For swing trade I normally stick to shorter cycles (usually 10 TDs (Trading Days / 2 weeks)).to around 100 TDs (20 weeks - 4 1/2 months. This cycle seems to be running short last year or so).

    Occasionally I look at longer cycles for context.

  4. I see there is something called "ENV" on the chart/ What is it? Thanks.

    1. John - ENV stands for envelope. These are channels enveloping the prices (offset by 1/2 the MA used to construct the envelope). Crossing of the upper and lower envelope lines of the different length MA envelopes generate buy/sell signals. Width of the envelopes is somewhat trial/error to get a good fit.

  5. See blog "practical technical analysis" as he sometimes posts Hurst (JM Hurst was a pioneer of cycles) cycles.