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.
In an unreal market in an unreal world, Friday’s selloff doesn’t exactly strike me as “the real thing” either. Maybe I’ve become too conditioned to expect the fraud to continue, and I’ll miss the real turn when it does come, and maybe this is it, but I don’t think so… yet.
Cycle screens had a small pullback today. The aggregate indicator dipped slightly after establishing a new high for this year.
By stopping at the long term trendline extended from the 2007 highs, the market gave the bears a thin thread to hang onto.
Cycle screening measures strengthened Wednesday, again supporting the new highs in the market averages. The aggregate index broke out to another new 3 month high.
This market reminds me of the Roaring Twenties. Coincidentally, initial cycle projections point to that area.
Some signs suggest that this may be only the beginning of a new 6 month cycle up phase. A whipsaw could change that appearance.