A while back (I can’t remember when, and I’m too lazy to find and link to it) I mentioned that the daily cycle in oil runs about 50-70 days.
The energy sector is one thing weighing on the stock market right now. Oil needs to turn the corner and join stocks in a new uptrend. As soon as oil puts in the cycle bottom it should provide a big boost to the general stock market.
Ultimately this is going to lead to a currency crisis either late this year or early next as the dollar works its way down into the three year cycle low. But I’m confident unintended consequences are the last thing on the Fed’s mind at this point. As is invariably the case politicians are only interested in the short term, which is a big reason why we have such huge long term problems right now.
I think we need to see the dollar break back below 82 in order to push the S&P through the 1100 resistance level.
Once we do that then its just a question of when the dollar breaks through long term support at 80. When it does it will fulfill my last two requirements and signal that the 3 year cycle decline now has its hooks in the dollar.
The other signal besides a break of 80 is a left translated intermediate cycle. A break to lower lows anytime in the next 9 weeks will meet that qualification.
If the dollar happens to do that in the next week or two it will form an extreme left translated cycle. And those tend to turn out extremely bad.