18 thoughts on “CYCLE LOW NEXT WEEK

  1. Gary Post author

    The rally out of the February low was much different than the rally out of the summer low of last year. In terms of breadth this rally has been one of the strongest in the last 50 years. Considering that all asset classes (stocks, gold, oil. and the CRB) were completing multi-year cycle lows it makes sense that the rally would be exceptionally powerful.

    1. Surf City

      Gary, Good video with some very valid points. Regarding your 10dma needing to turn down example, however, look at the GDX chart since Jan 20th. I can see at least 3 DCLs on the chart and neither the 10dma or 20dma every turned down (at least not yet).

      Also, the SPX close below the 20ma on Friday is bearish in the near term, IMO. Price needs to regain the 20 and break above the downtrend line from April 20th for me to start getting a bullish feeling here.

  2. shine07

    But now in a rough patch…your projection makes sense…still triyng to fit with an EW count (sorry, several years with EW thing…gives a (false?) sense of predictability). Anyway until mid June what we might expect? 2120? 2140?
    In the end of June coincides: BOJ; ECB; FED/FOMC statements (rate hike-no rate hike blabla tension) + Brexit Vote + Spanish elections. Planning be in cash at that time, except, may be, in USO.

    Nice weekend.

  3. Gary Post author

    Let me warn again against shorting the stock market. There is no guarantee that the S&P will tag the 200 DMA. This is a rigged game, and one has to always be wary of an intervention that might terminate the normal corrective move prematurely.

    If oil takes off on Monday it could also cause the DCL to abort early.

  4. Surf City

    LikesMoney also has the SPX on day 63 still looking for a DCL here. That is one long Daily Cycle count in anyones book. Whichever count scenario is correct, I think it would be wise to wait for price to break out above the down trend line from April 20th to confirm the DCL before going long again. JMHO


    1. Gary Post author

      Correct we need a break of the down trend line to confirm the DCL is finished.

      Cycles are evolving and becoming less dependable for timing. They just got too popular so the market is in the process of breaking the patterns. So from now on we should just expect longer cycles and multiple false bottoms.

      1. Surf City

        Gary, Wow, if cycles are not working and cycle timing is suspect, that Begs a lot of questions, including Cycle Trade setups. When in doubt, stay out is my thinking until the cycle becomes clearer.

        To me the status of the 7 Year Cycle is still an open question.


        1. Gary Post author

          The longer term cycles are still fine. It’s the timing of the daily cycles that is becoming erratic.

          1. Surf City

            So that “begs the question” when do you see the move into the next ICL starting to form?

            You seem to think June will be a move into all time highs. Unless we break the current down trend line, however, my counts show a possible IC Low setting up for the June/July timeframe.

  5. shine07

    Gary, depending on uncertain interventions? I do not think they intervene so often, do they!

    I think of that only occasionally when things unravel a bit, leting bulls or/and bears “taste a panic episode”…

    1. Gary Post author

      Only spordically IMO. Mostly just to prevent important technical levels from breaking and creating a selling panic. That’s what would have happened in February if the PPT hadn’t stepped in a prevented the market from breaking below 1800.

      I kind of expect they will want to keep the market above the 200 DMA as that will create selling pressure.

  6. plo888

    I disagree. first name one significant change in oil that has driven crude up to 46s, everyone is still pumping, there’s was only an agreement to keep pumping at its current level vs cut. second, with the 2 biggest companies disappointing last earnings you see goog and aapl making new highs in a month … ok, third financials leads markets, enuff said. And I’m more a technical than a fundamentalist. burrito!

    1. Gary Post author

      That one is easy. The crash as taken a big chunk of production off line and killed drilling. That production isn’t going to come back easily after so many got burned and the big companies are going to be cautious about discovery probably for many years to come.

      Yet the world continues to use more oil every year. It won’t be long before we have a deficit. The market is already pricing it in.

  7. Alexandru Popovici

    VICTOR, as a continuation of my reply to you in Gary’s prior post, I’m still keeping an eye on SLP despite its break in early FEB and ensuing weakness.
    I plan on a longer term re-entry on it but in the wake of its earnings report in OCT – by then the 7YCL should be put and many contracts signed for SLP’s new software.
    I’ll look to see hat it does not break below 7.26 during the summer risk-off mood of markets.

    Likewise, if you remember, in one of my prior posts in April, I was contrasting IBB vs ERi (Eldorado) arguing that it was nonsensical buying biotechs with a lot of overhead pressure and that ERI was a far better play.
    Recent history has underscored that.

    Buying stocks showing relative strength is a far less risky option than anticipating future relative strength even though the latter option seems more tempting.

    1. victor

      Yes, I’m watching SLP, its latest troubles make an opportunity to add it to portfolio, hopefully LABU will rise soon to free some money out, in minus for now…, so, you think not touch SLP till OCT., anyway, I will follow you with it..
      In April I looked on ERI and discounted it, anticipating labu to continue higher soon…
      You are very right with a last sentence…

  8. victor

    US unemployment holding at 5% … , showing that everything is good… I new the #’s is not real but this I didn’t expect:
    Gallup Good Jobs Index measures the percentage of the adult population that works 30+ hours a week for a regular paycheck. It stood at 45.1% this week. So, if one worked one week p/month, she/he considered employed …, no wonder Trump is winning…, establishment paint their rosy picture and live in it…

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