Sunday, February 23, 2014

Feb 24, 2014 weekly outlook

Here is the latest visual --

Looks like the market will continue to churn the first part of the week.  SP500 may set new highs but I doubt we see any substantial upside breakout.  Much the same type of action we saw this past week.  Not exactly as I expected - up/down/up/down with no clear direction established.  It appears though we are establishing a top, but then again it could be a base I suppose.... The longer cycles are down, but shorter cycles are up which explains my expectation of churning action.

GL traders

Monday, February 17, 2014

Week of Feb17, 2014 outlook

Completely off target last week....

Looks like short cycle top during week, but 24 day cycle (1/4 Wall)  remains up.  Wall cycle and 1/2 wall cycle down. So up for 2 days then down..

Even though we saw a buy the dip reflex  in 2014 it seems we have seen or should see a top soon.  We had a sideways move with fairly even spaced tops followed by an upside breakout.  This happened in 1929, 1937, 1987,  2000 and 2007.  Here is a visual for your consideration showing 2013 sideways and upside breakout:

GL traders

Friday, February 7, 2014

Feb 10, 2014 weekly outlook

Well, I was right about a couple of up days.  I was doing OK on   the down bias until Friday.  My target of 1745 wasn't off by much  and market did not spend a lot of time below that level.  Not a perfect call of the market, but not a bad call either.

Appears a short cycle (12 days) provided the bounce off the bottom.  That cycle should have spent its upside energy by Wednesday.  Then we will have the Kitchin, 1/3 Kitchin cycle, Wall cycle, and 1/4 wall cycle will be down. by mid week the 1/8 Wall (12 day) cycle will be down.

So we may get some upside (baiting the bulls?) and then some vigorous down the last couple of days of the week.  I expect the week to be down (and it could be substantial).  Eventually I think we test the 1695-1700 area based on some longer term DPOs (but not just yet)

Here is a visual:

GL traders

02/12 updated chart:


Tuesday, February 4, 2014

The shorter term Kress cycles - part 3

We have looked at 10, 12, 20, 24, 30, 40, 60, and 120 year cycles.  Even the shortest of these cycles is longer term than most of us would use for trading.  Still it is worth knowing the longer term context within which you are trading.

The last 4 cycles Kress incorporated within his studies of cycles are 2, 4, 6, and 8 year cycles.  2 and 8 are Fib numbers; 2x2 (or 4) and 2x3 (or 6) are multiples of fib numbers.  So the previously discussed Fib relationship holds. Some of you may use the shortest of these for trading - still though even 2 years is too long for Swing Trading (why I use the Kitchin and Wall cycles for swing trade discussion).  Otherwise I am totally agnostic as to which group of cycles you choose to follow.  I believe the discipline imposed by following a system (group) of cycles can improve your trading results and focuses the mind.  No system is perfect, but some are worthwhile if you make better trades and earn more for your efforts.

Here are the shorter cycles within the group of Kress cycles:

Clif Droke has written a book (just released) that discusses weekly cycles Kress used in his market analysis.  This is supposedly new information not formerly released by Kress.  But we can guess that the # of weeks are Fib multiples.  I am guessing 10 weeks (Half a Wall cycle), 20 weeks (Wall cycle),  60 weeks (1/3 Kitchin cycle), 40 months (Kitchin cycle), 120 months (10 yrs). If anyone has the new Droke book -- let me know.

GL traders, hope this discussion of Kress's cycles were worthwhile...

Update 2/5/2014:

Sunday, February 2, 2014

Feb 3, 2014 weekly outlook

If you follow my posts you know in January I had been somewhat negative looking for some cycle tops during January.  My outlook was for a 4% or so correction in January (which we got).

It appears that the longer cycles I generally follow (Kitchin, 1/3 Kitchin, and Wall cycles) are down.  The shorter cycles (1/2 Wall and 1/4 Wall) are up.  With these cycles offsetting in the coming week we probably will see some up days mixed with some down days with a slight down bias for the week.  It now appears the longer cycles have assumed dominance.

Here is a visual:

Weekly view:

GL traders

update 2/5/2014 (Hurst cycle charts):