09-19 from Droke

If after the cycle has peaked the European debt situation worsens, investors will likely move very quickly back into the safe haven investment vehicles, which includes gold.  Following the peak of the previous 6-year cycle in 2005 gold and the gold ETFs experienced a strong rally in the last couple of months that year and into the following year (see chart below).

http://www.financialsense.com/contributors/clif-droke/2011/09/19/another-round-of-consumer-price-increases-on-the-way

outlook for 09-19-2011

Not a certainty, but it appears we may have set a top Friday morning as the patterns suggested we might.  If so then next week will probably be a down week.  Let's face it - the market was up about 5% last week and there is no way that can continue longer term because 5% a week long term would be 250% a year.

I am trying to determine exactly how I need to adjust the placement of cycles on my charts.  For now though it appears the 11.2TD cycle in this sideways market is providing most of the market movement (up one week, down the next week).  The 5.6TD cycle seems also to be contributing.  The longer 22TD cycle and 34TD cycle seem almost dormant at this time as we move sideways with sizable weekly swings. 

A couple of things on my radar.  Thursday according to the spiral calendar ( http://spiraldates.com/?p=832 ) should have been a directional change day.  T-Theory is projecting a low end of  the first week of October  ( http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID4511625 ) which would work out with the cycle patterns if we are down next week and then up into the first week of October (11.2TD cycle span).  Finally, I noticed the CCI on the SPX exceeded +100 which usually indicates a top (sell) on Friday.

Here is the SPX swing cycles (I have moved some cycles around - not certain so I may have to make more changes later as data becomes available):

GL traders.  If next week continues up I may be hosed on my QID and RWM holdings.

outlook for 09-16-2011

Today was not as expected.  It seems clear that I am not correctly interpreting the data.  In looking at the chart I see a "W" which spans 11 days and should complete the right leg tomorrow morning.  So the span will be about 11.2 days.  the left and right half of the "W" is about 5.6 days.  This leads me to believe we may have the 5.6 and 11.2 TD cycles topping in the morning.  If true then I need to reevaluate the positioning of the swing cycles as the alignment may have changed.  I will try to do a more complete evaluation over the week end.

Overall though it appears that we should see a top tomorrow.  We will see.

Here is the SPX swing cycles with the "W" pattern highlighted:

GL traders. Do your own analysis.

outlook for 09-15-2011

I told you on Monday that up side pressure was building from the shorter cycles, to expect a pop Tuesday or Wednesday.  Well we got a pop, more than I anticipated.  In looking at the data and events I believe I may have had the cycles placed something like half a day off because I thought we would see a high earlier in the day.  So I shifted the cycle placement  to reflect this.

All the cycles except the 2.8TD cycle should be down tomorrow, so a sell down is anticipated.

Here is the SPX swing cycles:

Gl traders, do your own analysis.  QID and RWM positions not looking so good at this time.

outlook for 09-14-2011

I was right about the first part of the day, but we did not get the fade I expected in the second half of the day.  So not a great call over all.  I expect the next 3 days to see a downside bias (may even get severe).  As I have stated before calling the exact turning point is always difficult for the short cycles.  It is always possible you have the placement of the cycles off and get a bad read.  Still I told you Monday we likely would get an up side push by Tuesday.

We may get a bit more upside in the morning, but we are entering a time period when we could see a hard push down as multiple cycles should bottom together Friday (could be as late as Monday). The 34, 22, 11.2 TD cycles are down (as is the 65-70TD cycle).  The 5.6TD cycle should top and turn down tomorrow.  The 2.8TD cycle should bottom and turn up.  This cycle alignment should result in a considerable down side bias by the end of the day.

Here is the SPX swing cycles:

GL traders, do your own analysis.  I bought back some RWM and QID today (was slightly red on my positions at end of day).

Latest articles by Barker and Droke

Barker:
"Investors tracking large cycle turns and traders tracking small cycle turns to buy or sell can apply the MCD approach of price, time and sentiment to any global market or security. Tracking the market cycles in price, time and sentiment as an investor or trader can increase your odds of beating the averages,"
http://www.safehaven.com/article/22484/debunking-the-myth-of-the-efficient-markets-hypothesis

Droke:

"The most pertinent observation for the intermediate-term outlook concerns the 6-year cycle, which is scheduled to peak in approximately three weeks. Although the 6-year cycle is primarily an equity market cycle it also has a residual impact on the gold price. With the long-term economic cycles, including the 60-year and 120-year Kress cycles - in their final "hard down" declining phase through late 2014, gold should benefit from the economic bear market expected to worsen between now and the 120-year cycle bottom in 2014."
http://www.safehaven.com/article/22495/in-a-year-of-massive-change-golds-status-remains-unchanged
Enjoy the reads.

outlook for 09-13-2011

Looks like the last hour did in my expectation of a "red" day.  We may have gotten the push up just a little sooner than I expected....   With the market closing near the day's highs you often get follow through the next morning.

It appears we may get some more upside early in the day.  I believe though that any upside will begin to fade by the afternoon (or earlier) as the longer term bias (34TD, 22TD, 11.2TD cycles) is down for the next 3-4 days.  May be an opportune time to reload RWM and QID in the morning.  We will see.  In summary - up early and then fade later.

Here is the SPX swing cycles:

GL traders.  Do your own analysis.  I will be watching for QID to break below 52 and RWM below 33.75 for potential entries. How much below - depends on how the market acts tomorrow morning.