Sunday, July 27, 2014

July 28, 2014 weekly outlook

Overall earnings have looked good, revenues less good...  So far, the market has not responded much to these earnings.  Yes, SPX has set (barely) new highs.  But, the "M" pattern did not develop this past week, but the right leg may still develop over the next couple of days.  See for yourself:

Update 7/30 - With today's GDP report we have had considerable inventory build over the past 3 qtrs (around $200B).   The Kitchin cycle (a longer cycle of around 3.5 years) is sometimes referred to as the inventory cycle.  Once companies get too much inventory they slow down purchases because carrying inventory too long is expensive...  This pullback can lead to a stock market correction.  Here is a visual presentation:

GL traders

Saturday, July 19, 2014

July 21, 2014 weekly outlook

Sometimes it helps to look at recent past activity to get an idea of what is happening and the likely future  market.  Here goes:


A double top forming an "M" is a fairly common pattern and is formed as shown above.  All inputs considered if the "M" is well formed (not slanted) with even tops and legs what can we conclude?

In the above chart we see the 10 TD cycle contributing most to the pattern. We can conclude that all cycles longer than the 10TD and 20 TD are cancelling each other out.  This cancelling effect generally happens when a trend reversal is in the process of setting up.  So if the pattern completes (right leg down next week) we are looking at an intermediate length trend reversal (possibly)????

Friday, July 11, 2014

July 14, 2014 weekly outlook

The week ahead:

- short term 10TD cycle should bottom  along with 20TD cycle mid week (WED +/- 1 day.  Probably no more than 1% downside over next 2-3 days.

Warren Buffett's favorite measure of over valuation is when the value of the total market index exceeds the GDP.  We have reached that level, so maybe just a matter of  when the market corrects?

GL traders

Update 07/16:

Update 7/17:

July 20 is this Sunday which means if the 2009 bull market top wasn't already seen on 7/3/14 then it should be expected this week.

Sunday, July 6, 2014

July 7, 2014 weekly outlook

 For the week:

Appears 20 TD (1 month cycle) down, and 10 TD (2 week cycle) down...  Longer cycles (15 month, 7.5 month, 3.875 month) cycles down.  The 40 TD (2 month) cycle is up.  Should give us up to 2 weeks down (3%?).