The market got massacred, and while the cycle screening data was weak, it was nowhere near as weak as prices. Is that an artifact of all the whipsaws, or is there a deeper meaning?
On the charts it looked like a clear breakdown with a sub 1800 target. But was it?
Screening data rebounded from 4 days of declines, lagging the turn in prices by a day. These indicators are based on cycles of at least 4 weeks in duration. The market is moving so fast in this thinned out trading range that these measures are unable to respond quickly enough to be useful for timing…
I don’t even know why I waste my time with the bearish case. Last night I posed two scenarios. The first was the case for a breakdown. Then I wrote, “But a 6-7 week cycle projection of 1838 was hit, and a 13 week cycle projection of 1832 was almost done. Also in the mix…
Another week. Another new high in the composite liquidity indicator. But this time stock prices went the other way. Strictly on the basis of the liquidity trend, I am forced to conclude that this was just another instance of the dealers shaking out some inventory before marking them up and distributing them again. The $10…
Cycle screening measures did not support Tuesday’s rally.
Some signs point lower, but others say a significant bottom could form. Which should we believe?
Normally the cycle screening measures give us a little advance warning when the market is about to change direction. This time they were no help, turning concurrently with prices. We did not see the usual patterns that typically develop before an intermediate decline.
Another bear raid brought the market to a key support level. New short term cycle projections now point to 1840 and 1827, suggesting at least a minor break of support.
Significant weakening in cycle screening data accompanied Friday’s selloff, but as with prices, no key benchmarks were broken.