A major crash of the scale that this Cycle predicts for 2013 is extremely rare. The Cycle predicts a measured decline of approximately 460 points to 1025 SPX during the first half of 2013. This represents an initial 31% measured decline potential for the market.
The topping process has not matured yet. This may take another week or so to unfold. Once the topping process completes, the Cycle predicts that the red trendline is due to be tested perhaps late January.
3Day Chart
Deja Vu Cycle from 2011:
Daily Chart
Hi SC
ReplyDeleteNice looking chart and analysis.
looking back, you mention some like a crash at the beginning of 2012. Wondering if you may be seeing a bullish count that may happen as well this time?
Tys
I've warned plenty about the market in 2012, and the warning is the same today. Price has struggled to advance since March. Momentum is deteriorating.
DeleteIt is an expensive market according to this model. 2012 was a frustrating year with numerous false starts for the bulls and bears. Price just bounced around at high levels all year in 2012.
Such a move for the market is rare. There should be rare events occurring in the market.
ReplyDeleteVIX made a rare move this past week that has not been seen since 26 years ago in 1987:
"The VIX plunged 39% this week, marking it's worst percent drop in at least 26 years."
http://www.cnbc.com/id/100355693
Analysis of the VIX and interpretation of the extreme movement will be coming shortly.
ReplyDeleteThe final surge up for SPX occurred with December 27th analysis proving accurate:
ReplyDeletehttp://cyclicalmarketanalysis.blogspot.ca/2012/12/spx-final-surge-up-next.html
Currently in cash, and planning to short next week.
ReplyDeleteWith all due respect, you also said the final surge was over after 10pts remember, was that too premature ?
ReplyDeleteNo, the weak S&P futures action on Friday, December 28th (a week ago) was a concern, as mentioned on December 29th. However, SPX did hold up well on the Monday.
DeleteAs mentioned on December 29th, at that time, I was waiting for confirmation of the Deja Vu Cycle.
SCDecember 29, 2012 9:27 AM
"It will be helpful to see confirmation this coming week for SPX. It is preferable to see regular hours trading rather than after hours S&P futures."
December 27th analysis proved correct as per the Deja Vu Cycle:
ReplyDeleteDec 27th:
"According to the Cycle there should be a powerful surge up (short term only) next. The Deja Vu Cycle suggests a final surge up for SPX to complete the sharp rally phase from November.
Timing for completion is estimated around January 4th +/-.
The bigger picture Deja Vu Cycle must always be respected."
Hi SC
DeleteI am confused asto if the estimated date is around Jan 4 +/-. Why you didnt short on the 4th and just hold? since with the big cycle that is going to happen, your chart says we basically at or extremely near the top. Wondering what is holding your back?
Tys
My work with momentum suggests that SPX is likely to spend about a week near the top bouncing up and down as momentum fades.
DeleteTherefore, no rush to short yet. There may still be some upside, but not likely too much left either.
I decided to let the topping process mature, and then will take positions as momentum fizzles.
As a self-proclaimed permabear, I have to ask/note...
ReplyDeleteHow can you be bearish when the Rus'2000 breaks to new historic highs?
The Transports breaks to the upside, leaving below a trading range that lasted 1 year.
The sp/dow/nasdaq are a mere 1-2% from post 2009 highs.
The monthly, weekly charts outright BULLISH.
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I'm as bearish as they come, yet I can't consider the uptrend broken..until sp<1398.
Right now, it looks like we'll instead head for somewhere around 1490/1510..maybe 1520/30, if this rally extends into late Feb/March.
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The bears..need to be careful.
Big moves to the downside ARE coming, but for the moment, there is no real sign of it.
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Regardless of that, good wishes SC for 2013.
There could be more upside for SPX before it tops. I'm in cash waiting for the signals to short, and to go short I want to see signs of the momentum cooling.
DeleteI just simply present the Cycle, and the Cycle suggests that this is an expensive market. It could trade higher yet, but I think it is important to show this Cycle now because it is nearing maturity as shown.
As well, it is important to note that the Cycle predicts that the deep downside is still months away from occurring. Moderate declines with a test of the red trendline, and then quiet period are the next steps. The steep declines are months away according to this Cycle.
These next phases offer additional setups to short as/if the Cycle progresses.
Thank you for raising a number of good points. All the best for 2013!
If the September 1475 SPX high for 2012 is exceeded it does not make any difference to the measured target.
ReplyDeleteThis is because the measurement is taken from the 1475 Sept high to 1343 Nov low for SPX which would not be changed.
Therefore the target would remain the same.
DeleteWhat your thoughts on silver when the S&P falls? Do you think silver will fall also as they did in 2008 when other commodities fell?
DeleteI think Silver and Gold could rise initially with S&P falling. Then during the steepest declines for S&P, Gold and Silver can fall hard too.
DeleteSo the metals could act as a safe haven initially, but not for long imo.
The chart S&P 500 Index, $SPX, traded by SPY, shows a 2.6% climb to close the week of January 4, 2013 at 1466, which is likely an Elliott Wave 2 High from its 1,565 on October 9, 2007; it may very well enter an Elliott Wave 3 Down commencing the week of January 11, 2013; this Wave, when it does come, will wipe out virtually all of previously accumulated fiat wealth; one’s only protection is to invest in and take physical possession of gold in bullion coins or in Internet Trading Vaults such as Bullion Vault.
ReplyDelete