Saturday, May 7, 2011

$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




  1. Nice chart. It makes good sense. You have one for the CRB?

  2. Thanks. Equities topped first in fall 2007, then Commodities topped in summer 2008. This time Commodities should top first per the cycles.

    I outlined this in mid-April, and I believe commodities have topped. I expect these tops to hold for many years.

  3. Hi SC, in "commodities" you include also the precious sector, or only energy agricolture & industrial metals (copper zync nickel)?

  4. Yes G, I think everything including PMs can be classified as commodities at this point in time. The tide was rising for all of them, and now it's falling.

    The PMs eventually should diverge from industrial metals though. We should see sharp corrections first, but once some of the currencies run into more severe problems, then the PMs can really shine. This will take time.

    I'll show some charts.

  5. These guys weren't paying attention to the cycles. These moves can't be explained by fundamental research:

    "Clive Capital, the world’s largest commodity hedge fund, has been left nursing losses of more than $400m as a result of the dramatic collapse in the price of oil last week.

    London-based Clive – which manages an estimated $5 billion of client money – is the biggest of several big hedge funds believed to be reeling after the unexpected sell-off hit markets late last week.

    Others, including Astenbeck Capital, the Phibro-owned fund run by Andrew Hall, are thought to have taken double-digit percentage point losses to their portfolios, according to investors.

    The scale of the losses demonstrates that even the savviest investors in commodities were wrongfooted by the correction, one of the sharpest one-day falls on record.

    In a letter sent to investors on Friday and seen by the Financial Times, Clive said it was down 8.9 percent on the week after what it called “extraordinary” price movements on Thursday. Clive’s management said it was at a loss to explain what had caused crude oil markets to be “annihilated”.

    The move in Brent represented about a 5 standard deviation move, while WTI was a 4 standard deviation move,” Clive said in its letter. A five standard deviation daily move is a exceptionally rare event."

  6. LOL! Funny, short oil have actually saved my portfolio from the silver drop last week. The funny part is to see that we two both (let's say "sometimes")can do better then a thousands dollar payed experts.

  7. so basically youre thinking today/tomorrow timeframe, we are making the near term top? and will slowly go down from here

  8. It likely is still a little early in the topping process. There can be some dips along the way too.

  9. SC, are you saying that the topping process you previously called for on approx. May 11-12 might now happen at a later stage? Instead we might just see a few dips together with some bounces for a while longer?

  10. According to plan, and pleased with the progress so far. The mkt rallied as expected. Today looks choppy, and I think more of a rounded (flat) top should come after this dip today.

    Perhaps we are just a little behind schedule. I'll do an update on this later today.