outlook for 08-12-2011

Today appears to have completed the small inverted H&S pattern that I mentioned yesterday.  That implies we may get a pullback Friday.

Looking at the shorter cycles we see the 22TD cycle, the 11.2TD cycle and the 2.8TD cycle are down.  The 34TD cycle and 5.6TD cycle are up.  IMO the 20 week (4.5 month) and 9 month cycles bottomed.  But bottoming is a process and takes time.  The longer the cycle the longer the turn radius - so these cycles now should have little impact for some time.  See my prior post for a look at the remainder of 2011.

Based on the current cycle alignment it appears tomorrow should have a down side bias.  Here is a chart of the SPX:

GL traders.  Actual market performance may not fulfill expectations so be careful.