Obviously, the blog did not resume as mentioned in my previous post; the luxury of not having to write the entries and add the charts far outweighed the benefit I got from the exercise. This was especially the case due to the shift in focus of my trading to solely daytrading, as well as the Fed-fed markets showing zero interest or ability in correcting in even a minimal manner.
The current situation is dangerous enough that I felt compelled to post a comment about it, however (in case any of the three readers of this blog is die-hard enough to still be checking it).
I won't bother with the charts, because frankly the commentary should be explanation enough.
The loosely-termed Multi-year Cycle has over the past several cycles been running 15 months, and November is the current expectation for the MY Cycle high to be seen.
The Multi-month Cycle has been running shorter than normal at 12 weeks for both cycle highs and lows. Last week was the expectation of the MM Cycle high, and next week is the expectation of the MM Cycle low (because the declines into MM lows have been so shallow and brief they are falling right after the MM cycle highs). Typically, having passed the date for an expected high and being so near the expectation for a cycle low, I would expect a "cycle inversion" - where price makes its cycle high at the time of the expected cycle low. This could still happen, but given that today was also the expected day for the Multi-week Cycle high, I am more cautious than normal.
The MW cycle has been running at 12 days recently, with the high expected today. Technically, yesterday was a higher high, though today had a higher close. In either case, this blog in the past has touched frequently on the Monday/Tuesday - Thursday/Friday scenario and the much rarer Wednesday high/low scenario. In a nutshell, during the upside of the MW cycle, the market makes its lows of the week on Monday or Tuesday and its highs on Thursday or Friday. If the market happens to make its high of the week on a Wednesday during an uptrend, it almost always marks the MW high. So if the market were to close lower the remainder of the week, regardless of whether one wants to argue whether the high of the week was on Tuesday or Wednesday, it still points to the liklihood that the Multi-week high has been seen.
The majority of MW highs recently have not seen worthwhile sell-offs, but given that we are in the window of expectations for the Multi-month and Multi-year Cycle highs as well, I feel that this one could be different.
It is important to emphasize that "expectations" are not tradeable, but having such an expectation followed by the triggering of one's own sell signal should not be ignored; most swing traders and investors have long since abandoned their market sell signals after being forced to constantly buy back in at higher levels, but I would suggest the discipline to follow one's signals this time.
Now that the warning has been posted, it could easily take only a decent day up on Thursday or Friday to void the entire post (at least until the Multi-week high is eventually seen). In any case, I will not be following up on this post (either to gloat or admit failure), though I will likely post again the next time the cycles line up for a compelling bullish or bearish call.
Good trading,
Bruce V.
