I am trying to determine exactly how I need to adjust the placement of cycles on my charts. For now though it appears the 11.2TD cycle in this sideways market is providing most of the market movement (up one week, down the next week). The 5.6TD cycle seems also to be contributing. The longer 22TD cycle and 34TD cycle seem almost dormant at this time as we move sideways with sizable weekly swings.
A couple of things on my radar. Thursday according to the spiral calendar ( http://spiraldates.com/?p=832 ) should have been a directional change day. T-Theory is projecting a low end of the first week of October ( http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID4511625 ) which would work out with the cycle patterns if we are down next week and then up into the first week of October (11.2TD cycle span). Finally, I noticed the CCI on the SPX exceeded +100 which usually indicates a top (sell) on Friday.
Here is the SPX swing cycles (I have moved some cycles around - not certain so I may have to make more changes later as data becomes available):
I did some reading this past weekend, but it was hard to reach any firm conclusions.
ReplyDeletePhil Davis's charts show that the indices have not reached the upper line on his channels, especially for the Russell & NYSE. Thus, we could drift higher.
The Keystone Speculator believes that there is no disinflation or deflation yet, so the FED (FOMC meeting this week) does not need to start QE3. So, no QE3 announcement this week could cause the markets to fall.
However, I did read one interesting source that believes the coordinated Central Bank action last week was to provide adequate liquidity for Greece's eventual default. This source believes Greece will be allowed to default in October, thus they need to prepare now. This source also believes the FED will throw the markets a bone this week with some type of mention of QE3. The source made a big deal out of the fact that the FOMC meeting is a "two day" meeting. Thus, possibly the FEDS will announce something.
Doctrader - seems to me that neither the Governments of Europe or the US have any solutions. The Fed seems to be out of ammo (QE2 was basically a bust - same as with Japan in the 90s). The market cleansing will happen, it is just a matter of how soon.
ReplyDeleteDroke seems to think the 6 year cycle topping in October is significant. Barker is looking at the 6th Wall cycle as being weaker to the upside (every 3rd Wall cycle) into mid October when it turns down and should start a considerable downturn into the end of the year.
So I am not sure the governments or central banks can do much to delay the cleansing from this point as they have done for the past couple of years. Huge mortgage mess to still be cleaned up. Tons of toxic derivatives to still be cleaned up.
If you look at Federal reserve #s you see Federal debt over $14 trillion, state and local debt about $2 trillion, personal debt over $14 trillion, corporate debt over $20 trillion. That is $50 trillion of debt. Funny how the talking heads talk about cash on corporate balance sheets, but never mention the over $20 trillion of corporate debt.
And this doesn't even consider the $100 trillion or more it would take to fund the Social Security and Medicare promises. Neither the DemoRats or RePukCONs are being honest as to the extent of the debt and obligation promises outstanding.
I see no way out of the mess we are in other than a financial cleansing. We can discuss the form this will take, but it has to happen.
Inlet,
ReplyDeleteI agree with you that a market cleansing is coming. I just feel that the central banks will be successful in the short term "kicking the can" yet further.
I am following the Utilities (^DJU) & Retail (RTH) indices. So far, the sell-off today is consistant with profit taking.
Let's see what happens.