03-02-2012 recession ahead

I have noticed that recessions generally start when the economic numbers are  at highs.  Many people tend to project today's numbers into the future - which is why they are surprised when the economy takes a tumble.  ECRI predicted a recession by the second quarter of 2012 back at the end of September.  They have an excellent record in calling recessions.  Now I could show you a lot of charts that claim to predict the future. 

Instead I am going to show you one chart.  It is not some prediction but shows the "data" (not some prediction) and is referred to a coincident indicator.  It is on the verge of falling into an area that normally precedes or coincides a recession.  Here is the chart:

You decide, recession or not.    

03-02-2012 outlook

I believe the 20 week Wall cycle has topped.  We could set a marginal new high today, but I believe the odds do not favor that outcome.  That does not mean we immediately fall 100 points on the S&P.  Why?  Because the shorter qtr Wall (about 25TDs is now up as it just bottomed) and that will give us dueling cycles.  I have tried to determine the likely result of this.  Using DPOs for the Wall cycle (about 210 points and the qtr wall cycle (56 points) it appears they should almost precisely offset over the next 12 or so TDs. 

As a result of this dominant cycle pushing down as another pushes up it would imply an increase in volatility.  So there may be increased short term trading opportunities.  Be careful and preserve your capital. 

Here is the SPX and the outlook:

GL traders.  Let's make some money.   

Mar 2012 outlook

It appears the longer 20 week Wall cycle should top Mar 1.  At the same time you have shorter cycles that have just bottomed .  So we start the month with offsetting cycles.  It will take a week or more for the 20 week Wall cycle to build down side momentum.  I suspect we continue sideways at least thru the first full week of March.  We will have to see if the 20 week Wall cycle has enough strenth to give us a bit of down side.  By mid-March we get cycles sychronized to the downside  (Ides of March).

Here is how I see the SPX going into March:

Gl.  More of the same?

March 2012 spiral dates

http://spiraldates.com/2012/charts/scores_0312.png

02-27-2012 week ahead

This year so far reminds one of the start of 2011 when QE2 and excess liquidity by the FED was supporting stock prices.  The Fed claims there is no QE3, yet through interbank loans with the ECB they are supporting QE1 by the ECB - so we are seeing similar stock reaction.  So it seems to me there is QE3 by proxy by the ECB.  And this week we get additional QE (LTRO) from the ECB.  As with the FED (QE2 was less effective than QE1) one would expect ECB QE2  to be less effective than ECB QE1.  QE is the symptom of a problem, not a solution. 

Lat week we saw a new high on Monday (SPX) and then again on Friday.  I speculated Monday may be a high but lacked confidence (felt it may be later in the week or early this week).  With all the ECB liquidity flooding the world it supports higher equity prices so any pullback at this time is apt to be limited.  Still the market is over due a correction and it appears tops are in.  Here is the SPX:

GL traders.  If you used trailing stops for your long positions you should have had a good run.  It may be time to protect some of those gains.

02-23-2012 Is APPL ready to top?

AAPL has had a heck of  a run last 3 months.  Today was the investor conference.  No dividend announced.  Pretty ho-hum event.  So I looked at the chart:

Appears Money flow (MFI) has reversed to an outflow, cycles topping (channel upper cycle lines may have crossed - sell).  I suspect it is topping.

GL traders.

02-21-2012 update and comments

The 20 week cycle should top this week.  It may have topped today?  Let's see how tomorrow looks.  When it tops we will have the 22TD cycle and 20 week cycles down which should result in a pullback  of a few days.  Of course the 20 week cycle should give us a downside bias into early May.

Here are updated charts:

My plan is to buy RWM on any move up to $27 for a trade.  GL traders.

02-17-2012 outlook and comments

I have tried to give you sufficient advance warning as to what I feel will be a top.  So far this week is playing out much as expected with the 22TD cycle having topped and the 20 week (Wall) cycle topping offsetting each other.

The question is how much more upside is left?  I looked at the 20 week DPO to try and come up with an answer.  It appears we may have  1-1.5 points of upside left for the SPX.  Of course, anytime you try to call a top (or bottom) getting it right requires some luck.  So 1360.44 or so appears to be the upside as projected by the 20 week DPO (amplitude). Here is a picture:

BTW - I understand Pretcher of Elliott Wave fame has a projected target of 1360.

I also show the CCI, and it has fallen below +100 which I use as a "sell" signal.  Over the past few days  and tonight I have shown you:

• Cycles that appear to be topping
• MFI that is headed down
• CCI signaling sell
• DPO projection nearly fulfilled

I am sure you have your own TA indicators (RSI, MACD, Stochs) you look at, but I try to add to the more commonly used TA indicators to supplement your analysis.

GL traders.

02-15-2012 outlook and comments

In order to top (and turn down) it seems common sense - money has to quit flowing into stocks and turn down.  Can you agree with that?  So what is the Money Flow for the SPX telling us?  Take a look:

I have tried to update/refine the SPX chart:

It appears to me the 22TD cycle has topped and the Wall cycle (20 week) is at/near a top.  I expect we could be into a pullback by the end of the week or early next week.  We will see.

GL traders

02-14-2012 outlook and comments

The week started out as expected.  The 22TD cycle trying to move down, but the 20 week (Wall) cycle still has  2-3 weeks of upside left.  Which will win?  Near term the shorter cycle may have more amplitude on a daily basis - so we may see some pullback.   I see some calling for a substantial pullback - and we may get that in time.  I suspect that it is just not yet.

A level to watch is 1336.  If we can break below that level then we could get a healthy correction.  Here is a picture (FIB fan):

 GL traders