outlook 10-28-2011

In September the shorter cycles (5.6 and 11.2TD) seemed to exert the most influence in the market and we got quick moves up and down.  In October that influence seemed to shift to the longer (22 and 34TD) cycles.  If I have it right those 2 cycles have now topped.  Will influence continue to shift to longer cycles.  If it does then the 20 week (Wall) cycle should become more dominant.  Not saying this will happen but speculating it might.  If it does then we could see a down trending market for about 8 weeks into the third week of December as the 20 week cycle should have topped by mid October.

The Europeans seem to have come up with a partial fix, but are also kicking the can down the road.  Earnings season is almost over.  So I expect we will start hearing more about the Congressional super committee.  I am not optimistic about the results coming out of this group.  I hope I am wrong and they do some much needed budget cutting.

In my estimation most of the cycles should be down today (did the 34TD cycle top yesterday?) and therefore expect we will end down at the close of the day.  Here is the SPX swing cycles:

Gl traders.  Do your own analysis.