Comments and outlook for 05-26-2011

Today was another relatively calm day.  The downside pressure from the longer cycle (1 yr) down leg continues to accumulate.  At some point that energy will be released as the spring snaps back.  The longer it builds the more severe that snap back is apt to be.

For tomorrow the short cycles are mixed.  The 2.8TD will top by midday.  The 22TD cycle and  5.6TD cycles are up.  The 11.2TD cycle is down.  some upside expected the first half of the day and then possibly a fade after the 2.8TD cycle tops.  So I expect moderate action from the shorter cycles with a flat to down close.  But, I have no idea if the 1 yr cycle down leg will kick in tomorrow or not - if it does then we could break some downside support levels.

Here  is a visual of the shorter cycles:

Gl traders.  Do your own analysis, stops are recommended.