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Big Tops Lead to Big, Bad Bear Markets

This market is in the process of completing a huge top. Bear markets that are preceded by huge top patterns tend to last at least 18 months and may go on for as long as 30 months before reaching a final bottom. 1929-33 was an outlier at 42 months. That one lost 90%. We’ve had a couple of 50% off sales in the past 90 years since then.

Cycles – The 13 week cycle appears to be in a down phase headed for a low in xxxx xxxx or the xxxx xxxx xxxx xxxx, with a projection range of xxxx-xxxx (Non subscribers click here to access). 6 month and 10-12 month cycles seem to be in down phases that are out of sync with where they should be. That implies that the next longer cycles are in bear markets and are skewing the big intermediate swing cycle waves lower for longer.

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Third Rail Chart – The market would need to end the week above xxxx to break the 4 crash channels currently defining the trend. And even if they are clear of xxxx on Friday, that only gives them room for a bigger bounce while not completing a reversal pattern (Non subscribers click here to access)

On the other hand, a daily close below xxxx would open the floodgates on the downside. The proximate target would then be xxxx, and below that xxxx. Such a breakdown would complete an enormous top pattern with a conventional measured move target of xxxx (Non subscribers click here to access).

Long Term Weekly- The 3-4 year cycle top is nearly complete. A breakdown below xxxx (non subscribers click here to access) would confirm. This also looks like a 7 year cycle top. Confirmation will lag.

Monthly Chart – Trend support broke at the end of April. They’d need to end May above xxxx (non subscribers click here to access) to recover within that channel. Trend support is indicated around xxxx in May. If that doesn’t hold, then the target would be a support convergence around xxxx, with the next target xxxx if that fails.

Cycle Screening Measures –  These measures rebounded a bit last week but remain negative overall, and in a xxxxxxxxxx (non subscribers click here to access) pattern on the chart..

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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. 

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