The cycle screening data has now been updated.
When a technical signal is rendered and then suddenly reverses, we call that a whipsaw. Whipsaw signals are often signs of powerful moves ahead. Last week we had a helluva whipsaw of the post Labor Day short term buy signal for the market.
That massive turn has put the market in position for a big decline. It doesn’t guarantee it, but it does set up the conditions for one.
The buying the previous week actually weakened the market in an environment where longer term demand is limited by the constant shortage of money (liquidity) caused by two related forces. One is the Fed’s policy of removing $95 billion from the banking system every month. The other is that the US Treasury keeps adding $100 billion per month on average to the supply of investment paper in the market. Both processes suck cash out of investment accounts, requiring stocks to be liquidated. Non subscribers click here to access.
I cover this vicious spiral in depth in the Liquidity Trader Money Trends reports.
Cycles- . The 6 month cycle has topped out. The down phase will ideally last until the window of xxxxxxxxxx xxxxx xxxxxxxx. The 10-12 month cycle still appears to be in a top phase with a high due at any time from xxxxxxx x through xxxxxx xx. The 13 week cycle projection has dropped to xxxx-xxxx. Non subscribers click here to access.
Key swing cycles could be simultaneously on the downside in the first xxxxx xxxx xxxxx xxxx x xxx., a setup for a big decline at that time. Non subscribers click here to access.
Third Rail The bottom of an intermediate channel starts the week at xxxx and finishes at xxxx. There’s another support line waiting at xxxx. Below that is wide open spaces down to the xxxx area. To break the new downtrend channel the market would need to end the week above xxxx. Non subscribers click here to access.
Long Term Weekly Chart – Long term cycle momentum has broken down, reconfirming the bear market. The 18 month – 2 year cycle wave channel slope has turned flatter, but is still down sloping. Its lower boundary is approaching 3500. A weekly close below xxxx this week would confirm a 6 month cycle down phase. Non subscribers click here to access.
Monthly Chart – The bottom of the current downtrend channel and possible target for the current move is at xxxx in September. To break the new downtrend channel the SPX would need to end September above xxxx. Non subscribers click here to access.
Cycle Screening Measures – Thanks to my bank and data provider I was unable to update this portion of the report over the weekend as usual. Due to an overly aggressive fraud detection procedure, my bank, in its infinite wisdom, rejected my monthly payment for my market data that allows me to do my regular cycle screens. It’s a payment that I’ve made automatically every month since I joined this bank 7 years ago. And of course, neither the bank nor the data provider had any customer service available over the weekend. I will post an updated report as soon as possible. Non subscribers click here to access.
Likewise, I will be unable to post the weekly Swing Trade Stock Screen Chart Picks until data is restored. I will post that as soon as possible also. Non subscribers click here to access.
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.