Why beware? Well, usually, when the market does exactly what I have posed as the likely outlook for a few weeks, the time is about due for us to get a good slap in the face as a reminder to stay humble.
The other reason is that if I continue to be right, this market will get a lot worse fast. That’s great if you are short stocks, and ranges toward terrible depending on how long you are. If you are a “long only,” money manager and you’re all in cash, then you might end up feeling pretty good too.
But the temptation will be to buy the dip. The success of that will depend on both your market timing and your holding period horizon. This is not your same old, same old, Fed policy driven bull market any more.
Remember Rule Number One. Don’t fight the Fed.
Cycles There are signs that 13 week and 6 month cycles xxxx xxxx xxxx (subscriber version). However, xxxx xxxx phases are also periods of higher vulnerability for sharp declines into the low. Short term cycles are xxxx . The 4 week cycle is in a xxxx xxxx. The 6-7 week cycle has not xxxx xxxx but it appears to be xxxx xxxx xxxx. That suggests an xxxx xxxxxxx xxxx if the market follows through on xxxx xxxx .
Third Rail Chart – All of the conditions of the outlook we had for the last two weeks have been met. Now, there’s an interim support level at 4390-4400. If it holds, xxxx xxxx xxxx (subscriber version). If it breaks, the next area to look for support would be around xxxx xxxx.
Long Term Weekly– The market made a typical intermediate term xxxx xxxx xxxx (subscriber version). by breaking a long term wave channel, then xxxx xxxx xxxx. Given the rollover in the 3-4 year cycle indicators, the rebound in the market suggests only a limited xxxx xxxx xxxx.
So far, there’s no material change in the long term projections of xxxx xxxx xxxx (subscriber version), but I now believe that they are wrong and will not be met. I’m giving these no weight, and instead focusing on the price patterns, support breaks, and cycle indicators to show us the way.
Monthly Chart – The market now needs to be above xxxx (subscriber version) at the end of February to get back into the two uptrend channels. Failure to do that would imply the beginning of top formation. If that does not happen, the target in February would be (subscriber version).
Cycle screening measures are in a short term bearish configuration, with the intermediate term leaning (subscriber version). Market weakness this week would (subscriber version). A rally this week would suggest (subscriber version). A bear market 6 month cycle up phase would be much shorter and cover less ground than a bull market up phase.
These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance.