Sunday, September 14, 2014

Sept 13 weekly outlook and more

More of a downside move than anticipated, but it is what it is.  I continue to hold  RWM shares (R2K inverse) and have about a 1% gain at the close Friday. Because it seemed I had gotten out of sync with the market I have attempted to fix that.  I hope I have.  Here is that attempt:

Longer term the group of longer term cycles I have referenced in the past (Kitchin, 1/3 Kitchin and Wall cycles) seem to be coming together to provide a more protracted downturn.  The Wall cycle (20 weeks, 4.5 weeks) should be at a top, the 1/3 Kitchin 13,5 months is over 6 months up from its last bottom and topping.  The Kitchin cycle is well past its top and should be in the area where it goes hard down soon.

See for yourself:

How much of a pullback could we expect?   I looked at the nesting of cycles longer than the Kitchin  some time ago.   Two Kitchin cycles make up what is called the Juglar cycle (7+ years).  This cycle usually right translates and goes up 5-5 1/2 years and down 1 1/2-2 years.  Last bottom was likely early 2009 (up 5+ years 2002-2007) and down late 2007 into Mar 2009).  Here is an update of a chart I maintain showing the current iteration of this cycle:

If I have the timeframes correct then the Juglar Cycle should start its pullback soon and it could get nasty,

So this covers the long cycles?  Hardly!!! Here are longer cycles (that I posted quite a while [2-3 years] ago and their likely placement in time (2 Juglar cycles in a Kuznet cycle):

We are overdue for a downturn (some claim FED policy has elongated some of these longer cycles by 1-2 years and if that is the case any downturn could be very fast and powerful).
GL traders

1 comment:

  1. do you personally think we will go into deflation ? It might happen, I don't think it will, but if it does then yeah the markets are in for a world of hurt, but the US economy seems to have a lot of good/positive things going for it. Once we get through this correction, I think we'll be okay. As of today, I just don't see any major catalyst that will send us into a bear market.