Outlook for week 09-06-2011

I said last week up into mid week and down last part of the week was my outlook.  The week was falt as I opined it would be.

There are several things that could happen next week.  The German court could declare the bailouts of other Euro countries unconstitutional.  The Italian parliament is to vote on a new austerity program and seem to be backing away from prior commitments (lots and lots of amendments). Then Barry has his speech on jobs (more of the same?).  Any (or all of these) could negatively impact the market.  These are the known unknowns.  Then there is the unknown unknowns.

The cycles seem to anticipate one or more of these things will affect the market negatively.  The 67TD cycle (65-70 TDs) is down.  The 34TD cycle is down.  It appears the 22TD cycle has topped.  Shorter cycles may inhibit the downside at times but I believe the over all direction is down next week.  On average I believe we could see as much as 20 point a day down on the S&P (70-80 points for the 4 days) and that we possibly could test the 1100 level during the week.

Here is the SPX and these longer cycles:

GL traders.  Have a good Labor Day.