December 2012 update II

The downside of the 22TD cycle was offset more than I expected by the 34TD cycle upside.  We ended up mixed with the S&P and DOW down.  In the coming week it appears the 34TD cycle turns down and the 22TD cycle up (offsetting each oter to a great extent).

I have reviewed the longer cycles based on current data and made some shifts.  The Wall Cycle (141 calendar days, about 102 TDs, 4 5/8 months) appears to be running long (5+ months).  This implies the kitchen cycle is running long also (46-48 months) and the 1/3 kitchin cycle is 15+ months (3 X Wall cycles).

After this review I have attempted to show this visually:

And the longer cycles (less cluttered):

 It appears we may have seen our rally for December and a sizable selloff over the next 4-6 weeks.  Time will tell.

GL, happy trading and Merry Christmas.

December 2012 update I

Less movement than I thought would happen this past week.  Mixed close with S&P and DOW up, but NAZ down.   I had though the market as a whole would be down 1-2%.  Did not happen.

I have shifted my charts (short term cycles) a bit to better fit the data (I hope?).  The 22 TD cycle (lunar cycle) topped in late November and should bottom by late next week.  This cycle seems to have the most short term impact so we may get a 3-4% pull back during the week.  CCI dropped belown +100 which I view as a short term trading sell signal. Time will tell.

Here is a visual:

GL traders

Bradley dates 2013

Prime cycles

Shorter cycles are nested in longer cycles.  This was observed by students of cycles like PQ Wall. Wall called these nested cycles (9 Wall cycles - 20 weeks - 100 trading days in a Kitchin cycle.  And 16 Kitchin cycles in a K-Wave Super cycle [3.5 years x 16 = 56 years]) the Prime Cycles.

Here are these prime cycles:

 OK, 8000 years is a bit long.

Update: 12/02/2012 -- In looking at the copied table I noticed that 141 days / 3 is 47 days (and not 35 days), but 141 / 4 is 35.25 days.  On the other hand 141 days / 7  is 20.143 weeks.  20.143 weeks is 100.715 trading days.  100.714 /3 is 33.57 trading days.

33.57 / 3 = 11.157 trading days.  11.157 * 2 (or 2/3 * 33.57) is 22.314 trading days.   33.57 / 4 is 8.391 trading days.   8.391 / 4 is 2.797 trading days.

Gann liked eighths of 90 degrees (1/4 of  360 degrees [a circle]).  1/8 of 90 is  11.25, 2/8 of 90 is 22.50, 3/8 of 90 is 33.75, etc.  1 and 1/8 of 90 is 102.25.  Given the approximate same vaues of the trading days derived from the Prime Cycles table  I am incline to believe the Wall values (year, seasom, month) represent trading days and  not calendar days. 

If you differ please post your rationale.

December 2012 outlook

Our outlook for November was a bit off the mark the last third or so the month as the market rallied more than expected.  Hard to anticipate what the market will do from day to day as the market is news driven out of Washington (nothing is getting done to resolve tax/budget issues).  But, I will give it my best effort....

The cycles should give us a bottom by the middle of the second week of December (December 12??).  Depending on the news any down move could be substantial.  So I would use trailing stops for any long positions to try and limit losses on any pullback.  By mid December we should see a move up into January.

Here is a visual of the longer cycles:

If the downside (see DPO) of these longer cycles is realized we could see a pullback of 200 or more S&P points.  With the foolishness going on in Washington - anything is possible.

Here is the shorter cycles:

These shorter cycles are projecting a pullback of about 72 points.  So we expect a low in December around December 12 and a high toward the end of the month.

GL, traders.  Cash out inverses over the next 5-7 trading days and go long is my basic strategy for the month of December.

November 2012 update III

The market was up about 60 points from its low.  It recovered almost 50% of its correction in a very short period.  We can be confident this pace "up" can not be maintained, else the market would double in a very short period....

I took a look at the amplitude of the 22TD cycle (DPO(11) daily chart) and found out the amplitude of this short trading cycle was around 60 points.  So we have fulfilled upside expectations (and then some) for this short swing cycle.  Therfore, I expect the upside potential is limited the last week of November and think the possibilty of a down week are good.

Here is a visual of the short term outlook:

Might see some more up early week, fade by end of week??  GL traders - wrote covered calls on my RWM, hopefully will buy them back for a nice profit this week....

Gann - years ending in 3 (2013)

Below is an extract from Gann's teaching:

Each decade or 10-year cycle, which is 1/10th of 100 years, marks an important campaign. The digits from 1-9 are important. All you have learn is to count the digit on your fingers in order to ascertain what kind of a year the market is in.

No.1 in a new decade is a year in which a bear market ends and a bull market begins. Look up 1901, 1911, 1921, 1931...

No.2 or the second year is a year of a mirror bull market, or a year in which a rally in a bear market will start at some time. See 1902, 1912, 1922... 

No.3 starts a bear year, but the rally from the second year may run to March or April before culmination, or a decline from the second year may run down and make bottom in February or March, like 1903, 1913, 1923...

etc, etc...

November 2012 update II

The market has achieved the projected downside (plus a bit) for the 20 week Wall cycle (see DPO(51) on chart - 20 weeks is 100 days and half that plus 1 is 51).  So the market may be slightly oversold here (say 15-20 S&P points?) and we may get a bounce into Thanksgiving, but I am expecting lower lows into the first week of December.

Here is the shorter swing cycles visual:

The Wall cycle and 35TD cycle should provide some downside pressure into the first week of December, partially offset by the 22TD (lunar) cycle being up.  Also, the 3rd 1/3 Kitchin cycle (equal 3 Wall cycles and the third of the 3 Wall cycles is generally provides the most action) is down into the end of the month.  Since this is the 3rd 1/3Kitchin that means the Kitchin cycle is also ready to bottom.  With longer cycles we normally get the strongest move near a bottom/top (turning point).  So I believe we could see another 100 points down over the next 10-11 trading days....

Here is a visual of these longer cycles:

GL traders and happy Thanksgiving.

November 2012 update I

It appears the upside move by the shorter term swing cycles were frustrated by the longer Kitchin/Wall cycles which I anticipate will bottom by year end (or early 2013).  Seems the market is squarely focused on the fiscal cliff - which would correlate nicely with a bottom in the Wall and Kitchin cycles.

May get an attempt to rally (33TD cycle topping) first 2 days this upcoming week, but do not expect a lot of upside.  Buy back inverses on any strength.  After mid week the shorter swing cycles turn down along with the longer Kitchin/Wall cycles.  In other words the push down could get even nastier by mid-week.

Here is a visual:

GL traders...

Update 11-13:

Well the attempt to go up Mon-Tue was futile.  Told you not to expect a lot of upside (We got some during the day).  Interesting FIB ratio on the hourly S&P chart (thanks to Astro - see blog list for the chart):

November 2012 outlook

Based on the swing cycles (22TD or lunar cycle - 28.4 calendar days, and the 33-35TD cycle) it appears that the market should show some upside the first couple of weeks of November (green shaded area) and down the second half of November (orange shaded).  Some speculate given an eclipse in mid November we could see a cycle inversion associated with that eclipse.  We will see...

So I would take some profits on your inverses (Russell up 4-5% from where I suggested you get into inverses) and maybe buy an equal $ amount of  the Russell Index ETF with the intent to switch back in mid November.

I estimate the S&P index will go up 4% or so over the next 2 weeks.  Here is a visual:

GL traders - have a profitable November.

update 11/07/2012:

longer cycles bottoming end of Dec???