Monday, April 23, 2012

04-23-2012 the week ahead

I told you last week to expect a sideways week with a slight upside bias.  Even though there was a lot of movement at the end of the week that is what we got.

It appears the short cyle (1/8 the Wall cycle 12-13 days) topped and turned down.  The 1/4 Wall cycle remains up.  The Half Wall and Wall cycle are down.  Also the Kitchin cycle should be entering a hard down phase.

Over all it appears we should have a down week, and I suspect we may test recent lows and potentially head lower after that.

Here is a visual:

GL traders.  I will probably not be posting for a few weeks.  The market should be in correction mode the next 4-5 months.  There will be bounces, so be careful.

Tuesday, April 17, 2012

04-17-2010 observations

Th downturn is now taking a break as the shorter 1/4 Wall cycle has turned up.  This will probably last a week or a bit more.  The 1/2 wall cycle is down, the wall cycle is down but these will take a few days to build downside momentum.  Could we set a new S&P high?  Maybe, but I am doubtful this will happen as the Kitchin Cycle should be entering a "hard down" phase.  Overall - it appears we trend sideways with a slight upside bias near term (next week or so).

Here is a visual:

GL traders. 

Probably 1 more post before I enter the hospital  for needed surgery after which I expect to be offline for at least 3-4 weeks as I recover.  The next few weeks (and months) could get very interesting as we get a preview of the upcoming bottom in 2013-2014 as several major cycles bottom by 2014. The Kitchin cycle bottoming by mid-September or early October this year gives you that preview.

Sunday, April 15, 2012

04-15-2012 Going forward

I have encountered some health issues (not insignificant) and may at times be unable to post relevant information in a timely manner over the next few months.  I am hopeful I can overcome my health issues over the next few months.  I appreciate ll your support  the past 1.5 years and  wish you the best of luck in your trading.  Your best wishes and prayers are GREATLY appreciated.  Inlet

Friday, April 6, 2012

04-09-2012 observations

If you looked close at the last set of charts posted you say that as of the end of March (First of April) both the 20 week Wall cycle and 10 week (1/2) Wall were down.  This was enough to cause this past week to be down.  This combination continues this week and expectations are we get a second down week, 

The downside objective is around 1345 (1340-1350) for the week.  The downside for April is lower as the 20 week Wall cycle does not bottom until late April (early May).  Also keep in mind the Kitchin Cycle should start adding some serious downside by mid April.  So a downside of 1300 or lower would not surprise by the end of the month,

We could talk about no new QE by the FED, Spain, or the employment #s - but then the talking heads on CNBC would have nothing to talk about....  Here is a zoomed in chart of the S&P:

GL traders.  Sold 1/5 of my RWM that I bought about a week ago for about a 2% profit.  Starting to get my cost on RWM down closer to current prices.  

Sunday, April 1, 2012

04-01-2012 April and beyond - observations

We know Nenner is calling for a top in the 1440s by mid April.  How does that mesh with our analysis?  Recently we have focused primary on the Kitchin cycle and its component cycles.

The Kitchin is 42-54 months in length.  For convenience we have used 42 months in our discussion (measured bottom to bottom).  The up leg of the Kitchin tends to be longer than the down phase.  Of the 42 months the up phase will normally take 2 1/2 years (30 months) and the down phase 12 months (or more).  So the cycle is not perfectly symmetrical as depicted on my charts.

The Kitchen cycle is actually a business cycle (sometimes called the inventory cycle) that we apply to stock analysis.   The Kitchin cycle is often mistakenly called the 4 year cycle.  The Kitchin cycle is composed of shorter cycles.  One  third of it as a sub-division (14 months  or around 300 trading days).  Each third of a Kitchin cycle is made up of 3 Wall cycles (about 4.5 months or 100 trading days).  Each third Wall cycle tends to be the weakest in a group of 3 - that is the Wall that is within the downside of the 1/3 of a wall cycle so we see the impact of the 1/3 sub Kitchin cycle.  So within the Kitchin cycle the 3rd, 6th and 9th Wall cycles will be the weakest.

The reason to emphasize the Kitchin cycle is we are now 3 years plus into it and should be entering the are of maximum downside pressure (the last 1/8  or 6 months of the cycle).  Earliest bottom date could be 2nd week of September.  If the cycle runs long it could be later in 2012 or early in 2013 before it bottoms.  Given the expiration of Bush tax cuts, the payroll tax deduction, and the sequestering of funds starting in Jan 2013 it may run long.

Here is an ideal representation of the Kitchin cycle from the bottom in Mar 2009:

As you can see from the chart we should be in the "hard down" phase of the Kitchin cycle starting by mud-April.  This aligns with Nenner's prediction of a top by then.....  So I expect we could see a significant top in April.
Focusing in and looking at the 1/3 Kitchin cycle we see that we are in the 8th (of 9) Wall cycles within the Kitchin cycle.  Each Wall cycle is about 4 1/2 months so the current (8th) wall cycle should bottom in late April.  Then we go into the 9th Wall cycle (3rd in a group of 3) which tends to be weak.  This is rational as the Kitchin cycle should be moving hard down.  4 1/2 months from late April puts you into the mid September time frame where we will start looking for a bottom.  As mentioned above - there are tax ramifications Jan 2013 which could extend the down leg of the Kitchin cycle (42-54 months and we are using 42).  Note: Many refer to this as the 4 year or presidential election cycle.

Take a close up look at the Kitchin third and Wall cycles:

In summary  - we have the Kitchin ready to enter a hard down phase.  We have the 3rd of 3 (9th) Wall cycle on deck and normally this would be a weak cycle.  So April (as Nenner predicts) could be a pivotal month for a change in trend.

Gl traders