comments and the week ahead 05-09-2011

This past week played out much as expected as it topped and turned down. I had stated I expected at least a 20 point pullback (we got more).  A lower low Thursday was a bit of a surprise, still by the end of the week the market had stated to recover as the short cycles turned up. 

Next week the 11TD cycle will be up most of the week.  This cycle has about 31 points of amplitude so it should result in an up week.  Of course the 22TD cycle has turned down, so the upside potential is less than 31 points (I would estimate 20-25 points).  I expect we should see 1360ish on the S&P during the week, but I doubt we test recent highs.  Since the shorter cycles will be up/down during the week I do not expect a lot of overall contribution (or subtraction) for the week even though they may have 1-2 day impacts during the week.  By the end of the week the 11TD cycle should top. Setting up the next week of 5-16 (more on this later).

Here is a visual:

As I stated the 11TD cycle should top by the end of next week.  That means the week of 05-16 we have the 11TD cycle and the 22TD cycle down.  So that means the week of May 16 should be down, but just as the 22 day cycle bottoms we have a Wall cycle (20 weeks) topping and it will be down into the first week of July.  But, more important in my opinion we have the one year cycle reaching the point in its down leg (Jan-Jul) where it should start dominating to the downside.  So I believe by mid-May we will have a setup for a 6 week or so pullback in the market.  If you have gotten complacent - WAKE UP - things are reaching a critical point of change.

How big a change.  Here is a visual showing the potential amplitude of the 1 year and 20 wk Wall cycle into the first week of July when both should bottom:

As you can see the potential downside is considerable (around 280 points down on the S&P).  So this is a correction to avoid!!! or play to the short side.  And that traders is the story behind sell in May and go away. 

No this is not the big one, that starts later in the year (Oct-Nov) as the 2 year cycle and Kitchin cycle reach the point of maximum downside movement.  Of course there is the 10 year, 30 year, 60 year, 120 year cycle bottoms to follow that, but we will have time to address those at a later date.

GL traders.  Do your own analysis

comments and outlook for 05-06-2011

Today didn't turn out exactly as expected!!!  Looked like we might actually turn green by the end of the day up to about 2:30pm then the overall market fell apart.  So I took a little pain, but overall not too bad.  Got into HL at a decent entry and was down on that by around 6 cents a share at the close.  Had some inverse which helped.  Had some PBR which hurt.   So, overall I lost some, but not a lot.

Let's see what tomorrow brings.  Was this a one day event or the start of something?  You have probably heard the old saw "sell in May and go away".  There is a reason for that.  The 1 year cycle bottoms early July, but it really doesn't get hard down (usually) until mid-May.  And as you know if you have looked at my longer term cycles there are a couple of other longer cycles down.  Still, I don't expect the real damage from these cycles to  kick in  for a couple of weeks.  I will be watching this situation closely.

So tomorrow looks like the 22TD cycle starts to build a bit of downside momentum.  The 11.2TD cycle and 5.6TD cycle remain up.  The 2.8TD cycle should have topped near the end of the day and turned down.  May be a bit of a coin toss tomorrow.   I believe though the odds slightly favor an up day.

Here is a visual:

GL traders.  Do your own analysis and be careful, tomorrow may be tricky

comments and outlook 05-05-2011

Today was almost exactly as I projected.  Bottoms should have occurred for the 3 shorter cycles (11.2TD, 5.6TD and 2.8TD cycles) as the 22TD cycle has now turned down.  Since the shorter cycles turn quicker and happen over shorter periods the bias should now have turned up.  I do not expect a large up day tomorrow, but we could recover half of today's loss, so I do expect tomorrow to be biased to the upside and a green day.

Here is a visual:

GL traders.  Do your own analysis, today I bought the dip to establish a couple of positions.

PBR - a look at an oil company 05-04-2011

PBR appears to have put in a bottom and is at a point it should be considered for buying.  Here is a visual:

GL, traders.  Do your own analysis before deciding.  

update HL 05-04-2011

We last looked at HL on 04-11:  http://swingcycles.blogspot.com/2011/04/hl-and-mmr-update-04-11.html
and we said it should bottom around the first of May.  HL went mainly sideways with a slight down bias during this time.  IMO it is now putting in the expected bottom (may have done that today).

Here is a visual:

GL traders.  Do not buy before doing your own analysis.

comments and outlook for 05-04-2011

Today played out much as expected...  Tomorrow may well be the most interesting day of the week as there are 3 short cycles bottoming during the day.  So it should be no surprise if we are down hard the first half of the day, but maybe some bounce back by the end of the day.  Still the day should be down at the end of the day.  The 22 day cycle should have (or will top tomorrow) topped.

Here is a visual:

GL traders.  Do your own analysis, line up your buys.

comments and outlook for 05-03-2011

Given the weekend news one may have expected more enthusiasm.  Got a little upside (as I said we might) early and then drifted (as I suggested we would).  In spite of the news the market behaved as expected from my read of the cycles.  This is what we would expect as the 22TD cycle tops. 

Tomorrow I expect we might again get some up push at the open.  I do not think we will test today's highs and that the rest of the day will show some weakness.  The 3 shorter cycles are down (11.2TD, 5.6TD, 2.8TD) are down.  The 22 TD cycle is topping and should tum down by Wednesday.  There is a short one day cycle that may give us a minor positive open.  We should get a hard down starting by midday that should last in to Wednesday.

Here is a visual:

GL traders.  Do your own analysis.

Comments and the week ahead 05-02-2011

The 22TD cycles should top Monday or Tuesday.  Then the shorter cycles align Tuesday for a hard down Wednesday (could start sometime Tuesday),  I would not be surprised to see a 20 point pullback on the S&P between mid-day Tuesday and mid-day Thursday.  I believe though we see some recovery the last part of the week.

So it should be a volatile week.  I believe the bias is for a down week.  With a recovery starting by the end of the week into the middle of the following week which may test Friday's highs.  I do not see this as the start of the long awaited correction.  That will not start before mid-May at the earliest IMO, and possibly not until June.  So a "V" shape (maybe a square root) type of pattern forms?

Here is a visual:

Gl Traders, do your own analysis.  Read a couple of blogs and there seems to be expectations substantial in the way of a correction.  I believe these predictions are early.

Spiral dates calendar for May 2011

May 2011 shows three strong peaks on the 2nd coinciding with the new moon, on the 6th and on the 18th a day after the full moon. Whether the first two peaks will match separate turns or if they will both apply to a single broader turn is an obvious question. My guess given the sideways movement since the Feb 18th high is they will mark a high of a corrective wave B of 4 of the rally since last August. This implies a moderate decline in wave C or rangebound sideways movement for a month or two, then a move up to a modest new high in late summer or fall that would be expected to be the top.

http://spiraldates.com/2011/charts/scores_0511.png

comments and outlook for 05-02-2011

The market appears to be slowing down in its upside push.  Yeah, Friday  closed green, but given the huge beat by CAT it is surprising that the DOW did now roar to the upside,  Good news seems to be having less of an impact.  This is the type of action one expects as a cycle top approaches,

The 22TD cycle may top on Monday (but more likely that will happen on Tuesday).  The cycles are mixed - some up and some down.  The 22TD as mentioned is still up but will top soon. The 11.2TD cycle and the 5.6TD cycle are down.  The 2.8TD cycle is down.   So there is about a 50-50 chance of closing green (same for red).  I expect a rather slow day with a limited range on Monday.  My guess would be some upside early fading toward the end of the day.

Here is a visual:

GL traders, do your own analysis.