SPY - Backtest

A top is due in this timing cycle.  The top may have been in already on Friday, or no higher than approx. 1335 SPX early on Tues, May 31.  Another decline to commence next.

Daily Chart

$SPX - Anticipating Lower Lows

We are into choppy trading and I expect the lower lows to continue for SPX.  There is a cycle that I am currently using to forecast the day to day trading in the Financials Indexes with particularly good accuracy. 

I have completed Intermediate and long term charts for SPX with target levels.  Frankly speaking the markets are trading at levels which represent a bubble of unprecedented proportions.  I do believe I have the patterns in place that show clearly how, and when, the bubble pops - it's a shocker!      

30min Chart

SLV - Beware the Silver Snake

Earlier in May I noticed a bullish inverse pattern setting up on Silver that I initially thought was pointing to a large bounce.  Then last week I realized that my inverse pattern was only indicating a moderate bounce for Silver in the near term.  Meanwhile last week my SPX charts were indicating a hard plunge for Monday/Tuesday - it happened. 

I had decided late last week to play it safe with Silver because I was concerned that the anticipated SPX plunge could lead to a risk-off Silver selloff early this week.  SPX gapped down in a serious way on Monday, but Silver only saw a moderate gap down.   

My inverse pattern correctly called the gap up breakout today and price movements at number 7 and 8 today.  Now, I am just seeing a slow grind up for Silver to top out around $37.  Then I foresee it plunging hard down to my first target at $28.50, and then finally bottoming at $27.   

30min Chart

The following is the same Intermediate Term chart that I had posted on the weekend.  Notice I had mapped out a small push up for Silver to $37 this week.  That is occurring now.  Beware the Silver Snake -  look what happens next!

4hour Chart

SPY - Equal Time Cycle Update

According to the Equal Time Cycle posted on May 4th, I was looking for a low on May 20th or 23rd.  We also have a 31 day cycle that indicated a bottom today.  Therefore, I will be watching for a short term low to be put in very soon.   

$Rifin (Financials) also traded down to the red line support level today as shown in a previous chart.  This should provide some support on a short term basis. 

We should see a short term bounce next, and then much larger declines to follow.  Further time cycle patterns and target levels will be posted shortly.

Daily Chart

Silver - Intermediate Term

There is a large bounce coming for Silver, but I recognized last week that it starts from lower down.  I have had time now to look at Silver in depth, and my estimate is for a bottom June 6 or 7 at $27.  Notice that the bottom target is at the apex of the 2 orange lines.

The long term (several year) cycle is very bearish for Silver.  In several years time, my target would be approximately $5.  However, that would be the start of a long (many decade) impressive bull market in Silver.  I'll explain this further at a later date.

Silver might see a quick little pop, and that presents a nice spot to short.  The first bottom at $28.50 might be as soon as Tuesday, May 24th.

4hour Chart

$Rifin - Financials Triangle Broken

I have been warning about the weak performance of the Financial sector for some time.  There is a large triangle which appears to be broken now.  The small bounce over the last few days may just be a backtest of the lower triangle line. 

A few days ago Rifin tested near the March lows!  Frankly, that is disturbing...  The difference between SPX and Rifin performance is beyond glaring, and I think this is a very dangerous situation now with the triangle breach. 

Tomorrow, May 20th is when my next time cycle is due.  Perhaps a backtest of the broken lower orange fork line tomorrow might be next.  If so, then tomorrow could be a high for the market, with a serious decline to commence early next week.  

Upon careful consideration I have decided that it is simply too dangerous to have any long bullish exposure to this market until further notice. 

I highly recommend that it is time to review exposure immediately for the sake of risk management.

2hour Chart

     



















Tomorrow, I am going to sell my Silver position.  The Silver pattern is interesting and I am going to be following that closely, but Financials risk trumps Silver in my eyes.  I am concerned about the situation with the financials, and will play it safe.  There are lower risk entries on Silver that I will look at instead once things further develop. 

4hour Chart

Silver - Updated

A potentially very bullish pattern for Silver (short term) remains intact.  Point 6 needed some extra time to develop.  I'll have additional charts coming tomorrow for Silver including an intermediate term view.

I have mentioned recently that many time cycles are converging around May 20th.  It has been debatable whether that is a bottom or top.  Perhaps it is more indicative of a period of volatility as this Silver chart suggests.

30min Chart

$SPX - 30min Chart

The triangle "looked" as if it had broken down in the last few minutes of trading.  However, price is hovering at the pink line once again.  In the past this line has been an important dividing line marking the start of substantial rallies and declines.

As well, of note, the triangle apex is pointing to May 20th. 

30min Chart

Silver - Inverse Pattern Top/Bottom

I noticed an interesting inverse pattern that could be signalling a sharp rally in Silver.  I also see a symmetrical pattern that looks promising for Silver in the near term. 

I took a long position in Silver on Friday.       

30min Chart

$SPX - May Timing Update

An additional bounce to form more of a rounded top would look best.  I consider this market to be dangerous at this point in time though so caution is warranted.  The minimum requirements according to this cycle have nearly been met. 

We do have a triangle that has formed with the apex May 20th.  Many timing cycles are now converging on May 20th.       

I am watching intensely, and will post additional details as available.    

30min Chart



I am also pleased with my 2007 top cycle.  It has been quite accurately predicting the significant movements. 

3-day Chart

USO - Crude Oil Update

This was my forecast for Oil made on March 13th, 2011: 

"Crude has been inversely correlated with the markets since Libya. I think that may be about to change. $WTIC may be very near a short term bottom (early this week). So I think crude may actually rise now with the markets. A possible next target is $119. The media will probably say this is evidence of economic recovery.

There is talk of crude jumping to $150 - $225. I don't see this happening. Crude probably tops in April, and I'm very bearish on crude from that point."

60min Chart

$SPX - May Timing

Notice that SPX bounced at the pink line.  This is the same pink line that has been in place on my charts for months.  This is a long term trendline that traces back to the 2007 top.

The following 30min chart shows the symmetrical pattern currently unfolding.  I show the equivalent points in the cycle using the green arrows.

On the Left side of the Cycle Line there are 11 trading days to the green arrow.  On the Right side there are 5 trading days to that green arrow. 

11/5 = 2.2 Multiplier (the cycle is currently unfolding at a 2.2 times greater velocity, in terms of time, on the R side versus the L side)

From the Cycle Line on the Left side it is 31 trading days to the March 16th bottom.  31 days/2.2 Multiplier = 14 trading days.  May 2nd top plus 14 trading days is May 20th.  This cycle is suggesting that is a bottom. 

May 20th is also the day that my 22 day equal time cycle is pointing to as a major pivot point.

I also used the Multiplier to roughly estimate a rally up to a rounded top May 11-12.  

Remember, all of these timing estimates are approximations. 

30min Chart

        

  

SPY - Another Equal Time Cycle

Friday May 20, 2011 or Monday May 23 should be an important day according to this equal time cycle.  My view is that it is likely an important bottom.

Daily Chart