Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Canadian Cannabis Stocks CRASH as Canopy Growth Hits a Dead End - 14th Dec 19
Retail Sector Isn’t Dead, and These 6% Dividend Paying Stocks Prove It - 14th Dec 19
Top 5 Ways to Add Value to Your Home - 14th Dec 19
Beware Gold Stocks Downside - 13th Dec 19
Fed Says No Interest Rate Hikes In 2020. What About Gold? - 13th Dec 19
The ABC’s of Fiat Money - 13th Dec 19
Why Jo Swinson and the Lib Dems LOST Seats General Election 2019 - Sheffiled Hallam Result - 13th Dec 19
UK General Election 2019 BBC Exit Poll Forecast Accuracy Analysis - 12th Dec 19
Technical Analysis Update: Tadawul All Share Index (TASI) - Saudi Arabia ETF (KSA) - 12th Dec 19
Silver Miners Pinpoint the Precious Metals’ Outlook - 12th Dec 19
How Google Has Become the Worlds Biggest Travel Company - 12th Dec 19
UK Election Seats Forecasts - Tories 326, Labour 241, SNP 40, Lib Dems 17 - 12th Dec 19
UK General Election 2019 Final Seats Per Party Forecast - 12th Dec 19
What UK CPI, RPI INFLATION Forecasts for General Election Result 2019 - 11th Dec 19
Gold ETF Holdings Surge… But Do They Actually Hold Gold? - 11th Dec 19
Gold, Silver Reversals, Lower Prices and Our Precious Profits - 11th Dec 19
Opinion Pollsters, YouGov MRP General Election 2019 Result Seats Forecast - 11th Dec 19
UK General Election Tory and Labour Marginal Seats Analysis, Implied Forecast 2019 - 11th Dec 19
UK General Election 2019 - Tory Seats Forecast Based on GDP Growth - 11th Dec 19
YouGov's MRP Poll Final Tory Seats Forecast Revised Down From 359 to 338, Possibly Lower? - 10th Dec 19
What UK Economy (Average Earnings) Predicts for General Election Results 2019 - 10th Dec 19
Labour vs Tory Manifesto's UK General Election Parliamentary Seats Forecast 2019 - 10th Dec 19
Lumber is about to rally and how to play it with this ETF - 10th Dec 19
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19

Market Oracle FREE Newsletter

UK General Election Forecast 2019

Stock Market 90-Day Cycle Looking for a Correction

Stock-Markets / Stock Markets 2010 Nov 10, 2010 - 07:32 AM GMT

By: Jim_Curry

Stock-Markets

Best Financial Markets Analysis ArticleIn a prior article, I made note of the fact that the larger uptrend was firmly established into the Spring of 2011 (or beyond), with the four-year cycle looking to peak at some point between April and July of next year. In-between, for the shorter-term I mentioned that there was a 90-day (18-20 week) cycle that was due to peak sometime around mid-November (plus or minus). In terms of price, a test or push above the April high of 1219.80 SPX CASH was favored to materialize on or before this cycle turned south, which is obviously what we have seen with the recent action.


What to expect now

With the above said and noted, the 90-day cycle (chart, below) is in the range for a peak, though whether that peak is yet in place remains to be seen. However, the technical indications that I track suggest that - even if a higher high is still out there - we should be relatively close to a top for this particular wave. Having said that, I should also point out that longer-term indicators - like the advance/decline line - are not showing any divergence against price. With that, the suggestions are any correction with this 90-day wave should be followed by higher highs again on the following swing up with this cyclical component.

SPX Cash Daily

Calling for the largest-percentage drop since the late-August bottom is not an outlandish forecast, as the greater-majority of the drops (since August 27) have been limited to just over 2% off the top.

Going a bit further with the above, we can take a more detailed look at the 90-day wave, by simply going inside the cycle itself. I keep a detailed record of every up-and-down phase of each of the cycles that I track, going back many, many years. With that, we can take a look at the expectations for the downward phase of this component, and then take a look at the statistical information to see what additional information is available; this could give us some idea of what to look for in the next few weeks.

90-Day Cycle Statistical Observations

As to how the next 90-day downward phase should play out, I am looking for it to form the pattern of a 'higher-low' on it's next correction. In other words, I am looking for the cycle to hold at or (more likely) well above it's prior bottom, which, as noted above, was the August 27 low of 1039.70 SPX CASH.

Adding to the above, since the current upward phase took out the prior high for the wave - which was the 8/9/10 high of 1129.24 - it has registered the pattern of a 'higher-high'. All said then, I am looking for the pattern of a 'higher-high'/'higher-low' on the whatever correction that is seen with this component. With that, we want to go into the past history of this wave, to see what statistical inferences can be drawn.

Why should we be looking for the pattern of a 'higher-low' with the next 90-day down phase? This is due to the fact that the larger 180 and 360-day cycles are still pointing up at the present time - with the larger 360-day component looking higher into the Spring of 2011. This is also due to a pattern analysis of the 90-day wave itself. In other words, when it forms the pattern of a 'higher-high' - and is also bullishly-translated - then the probabilities are better than 75% that it will form a 'higher-low' on it's next downward phase that follows.

In taking a look into the 90-day downward phases in the past that have registered the pattern of a 'higher-high/higher-low', the average decline was about 6.9% off the peak, and lasted approximately 20 trading days before bottoming. However, with the larger trend set firmly higher into the Spring of next year, what I am more interested here are what the greater-majority have done (i.e., on 80% of occurrences).

Looking at what the greater-majority of the 90-day downward phases have done in the past, we can see that about 80% of these have seen their declines lasting 7 trading days off the top. In terms of price, the same 80% have witnessed corrections of 4.4% or better. Ideally, this correction should come in the form of a three-wave affair to the downside.

Stepping back, if the above correction does materialize going forward, then, as noted earlier, the assumption is that the SPX will go on to form a higher high again on the next 90-day rally phase that follows. In other words, after a correction of a week or three off the top (whatever the cycle gives), then we should see a continued break to higher highs again into January, 2011, with the still-outstanding upside target from the 180-day cycle to the 1243.16 - 1286.36 region. Stay tuned.

By Jim Curry
Market Turns Advisory
email: jcurry@cycle-wave.com
website: http://cyclewave.homestead.com

Jim Curry is the editor and publisher of Market Turns advisory, which specializes in using cyclical analysis to time the markets. To be added to our mailing list click HERE

Disclaimer - The financial markets are risky. Investing is risky. Past performance does not guarantee future performance. The foregoing has been prepared solely
for informational purposes and is not a solicitation, or an offer to buy or sell any security. Opinions are based on historical research and data believed reliable,
but there is no guarantee that future results will be profitable. The methods used to form opinions are highly probable and as you follow them for some time you
can gain confidence in them. The market can and will do the unexpected, use the sell stops provided to assist in risk avoidance. Not responsible for errors or
omissions. Copyright 1998-2010, Jim Curry

JIm Curry Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules