A number of time periods are converging today/this week-end:
25MAY low + 102 days = 04SEP
21JUN top + 74 days = 03SEP
06JUL low + 61 days = 05SEP
20JUL low + 47 days = 04SEP
Note that I've added the 61-day period to the list, it is less important than the other ones but can be used to confirm a time target.
The chances are thus for a top today. The Dow is still up on the day now, but should it reverse by the close, this could create a chart pattern similar to that on 21 June.
The 3 main time periods that we had found to be important since 2007 (47, 74 and 102 days) converge on 06AUG2010, as well as a few other ones:
The Dow and NASDAQ made a top yesterday, 1 trading day after the 06AUG target, while the SPX made its high on 05AUG, one trading day before. In addition, we had a new moon overnight (10AUG at 03:08 UT) with moon perigee later today.
Note the possible wedge formation, it's actually most convincing on the NASDAQ.
A quick note on the "outlook for the rest of the year": instead of a high in early July and a low in early August, we had a low in early July and what now looks like a high in early August. If this is an "invesrion", then one would expect August to be straight down.
After a longish hiatus, I'm ready to start posting again. It looks as though we might see some interesting market action in July.
Here is a chart that was drawn on 26 May, summarising the outlook for the rest of the year. It's mostly guesswork of course, but it can be useful to make such guesses from time to time, if only to express one's bias:
And here are our key cycle dates. The 26APR10 top came a bit late, so we're looking at both the original 102-day cycle, and a parallel one that fits with the 26APR10 top.
The Dow has gone up few days beyond new moon, and made a new high yesterday. Time for a breather now.
The low was made on Friday, after late plunge followed by a quick rebound. Once resistance around 10,050 is cleared, this rebound should get us to 10,180 at a minumum (.382 retrace), more likely to 10280 (.500 retrace).
This looks like a bottoming process, there is a chance that the short drop below 10K was it. Holding above 10K would confirm this.
The Dow's high on Thursday, 14JAN10 coincided almost exactly with this month's new moon and eclipse on 15 January at 07:11UT. There is also an important Fibonacci time projection pointing to mid-January:
11OCT07 TOP + 512 days = 06MAR09 LOW
06MAR09 LOW + 316 days = 16JAN10 (where 316 = 512 * 0.618)
Interestingly, after 73 (=74-1) weeks down between OCT07 and MAR09, we have now had 46 weeks up. Remember that we have been tracking time periods of 46, 74 and 102 days in the past, so two of these numbers are now appearing on the weekly level.
The Dow has declined more than 500 points from the high - a first indication that a top might be in place. However, over the past 6 months we've seen a number of fast sharp declines immediately followed by quick rebounds. This is the pattern to watch for, to either confirm or inform the possibility of a top being in place.
When the Dow fell out of a wedge in late September, the decline was sharp but short. The Dow now appears to have formed yet another wedge, and it has broken down form that one also. The next time targets are 9-10 November, then 16-17 November. Even if this should again only be a short correction, one more downside acceleration looks likely.
At the same time, the euro has broken an uptrend line against the us dollar:
Coincidence? Maybe not.
We did go above 10K on the Dow, but where is the momentum? Feels a bit like puff pastry here. If 10K does not hold, look out below.
If we break through 10K today, we could see a jump of a few hundred points very quickly. This could be the exhaustion move.