Last Short Term Cycle Update for 2015

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The following was posted on December 14,2015
Today's comments are in Blue

Short term details:(every date is +/-)

The short term and intermediate term cycles are suggesting a bottom sometime in late November to early December.   These dates have now extended slightly into December.   As of today this bottoming process has extended to at least last Friday Dec 11th.     The low came in on Monday Dec 14th and this was one of the dates given to watch for a possible turn in the stock market.

 

Short term cycles suggest some volatility from Dec 5-7th to Dec 24th.  A high came in of Dec 7th and then catapulted down into last Friday Dec 11th  The low came in on Monday Dec 14th and this was one of the dates given to watch for a possible turn in the stock market in the following paragraph.  

The cycles suggest several dates to watch for possible turns.  

They are Dec 9, 11, 13, 14, 16-19 and the 24th.    A lot of energy and volatility came in on Dec 9th and Dec 11th and both were significant.  Dec 14th was significant as well.  Dec 16-19 could be a high and Dec 24th a low as suggested by the short term cycles.   This was a direct hit as the high did come in on Dec 17th in the middle of the forecast range of Dec 16-19.   So far, the Dec 24th +/- low was a little late as the market did bottom on Monday Dec 21st.  But if you follow this Blog you would have read that there was a shift in the SPY Buying Pressure and that indicator called the market turn.

 

These dates are always +/- 

From Dec 24th the cycles have an upward bias into December 29th to January 7-14   

 

More on both the short term and intermediate term cycles as we get through some of these dates...

 

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Past performance is not indicative of future results

chart: SPY shift in Buying Pressure

This is a chart of the SPY and Buying Pressure.   The SPY recently had been making lower lows, BUT, the Buying Pressure did not follow the same pattern.  The Buying Pressure has now made a higher low. 
If this pattern continues then it will fall in line with the short term cycles suggesting a low this week and a move up into late December and or early January.

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chart: SPY gap open was sold into

Courtesy of TradeStation

This is a 4min chart of the SPY.  The white box highlights the gap open.  The red line histogram at the bottom is the OBV.  As the market gapped up the OBV displayed red lines below zero indicating that the open was being sold into.   If the gap up open was being bought the OBV histogram would have had green lines above zero.

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chart: % of DJIA stocks above 10DMA

Courtesy of IndexIndicators.com

Note where we are again as highlighted in yellow.
Some kind of a bounce will try to work off this oversold condition.   The short term cycles are suggesting a low this week and then a bis up into Dec 29th to Jan 14th time frame.  As we get closer to this period more information will hopefully become available.

The short term cycles suggesting a possible move up into January would be concurrent with the intermediate term cycles suggesting a high sometime in January.  If these two cycles do in fact turn out to be working in conjunction with one another and the stock market does move higher into the January time frame then there would be more evidence that a high is forming and a low could develop a few months later around mid year +/-.

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chart: DJIA 1929 - Do the signs look familiar ?

DJIA 1929 - Courtesy of Worden Bros

1) Blue vertical arrow - a red monthly price bar broke the fuschia MA
2) Red vertical arrows - subsequent to the above #1, three blue monthly price bars developed
3) Yellow circle - MACD sell signal
4) Blue horizontal arrow - Histogram below zero and below it's blue MA
After the third blue price bar in #1, the stock market continued lower into the July 1932 bottom

Do the signs on this chart of the 1929 DJIA look familiar?
If you saw JustSignals last post, it should.
If you didn't, here is the link:
 http://justsignals.blogspot.com/2015/12/charts-djia-monthly-will-history-repeat.html

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Past performance is not indicative of future results

charts: DJIA monthly - will history repeat ?

DJIA 2000-2001

Courtesy of Worden Bros

After much staring at the DJIA monthly charts the following repetitive items came to light at the 2000 top, the 2007 top and again at the, so far, 2015 top.

1) Blue vertical arrow - a red monthly price bar broke the fuschia MA
2) Red vertical arrows - subsequent to the above #1, two blue monthly price bars developed
3) Yellow circle - MACD sell signal
4) Blue horizontal arrow - Histogram below zero and below it's blue MA
After the second blue price bar in #1, the stock market continued lower into the October 2002 bottom

DJIA 2007-2008

Courtesy of Worden Bros

1) Blue vertical arrow - a red monthly price bar broke the fuschia MA
2) Red vertical arrows - subsequent to the above #1, two blue monthly price bars developed
3) Yellow circle - MACD sell signal
4) Blue horizontal arrow - Histogram below zero and below it's blue MA
After the second blue price bar in #1, the stock market continued lower into the March 2009 bottom
DJIA 2015

Courtesy of Worden Bros

1) Blue vertical arrow - a red monthly price bar broke the fuschia MA
2) Red vertical arrows - subsequent to the above #1, two blue monthly price bars developed
3) Yellow circle - MACD sell signal
4) Blue horizontal arrow - Histogram below zero and below it's blue MA
After the second blue price bar in #1, the stock market ?????????

The question here is Will History Repeat Itself Again ?

Post from Sept 4,2015    "Major Signal"
Link     http://justsignals.blogspot.com/2015/09/charts-major-signal.html

Post from Nov 16,2015   "Major Sell Signal Update"

Link     http://justsignals.blogspot.com/2015/11/major-sell-signal-update.html


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Past performance is not indicative of future results

chart: Fed Rate Hikes = ?

The following is an excerpt from realinvestmentadvice.com
By Lance Roberts

Looking back through history, the evidence is quite compelling that from the time the first rate hike is induced into the system, it has started the countdown to the next recession. However, the timing between the first rate hike and the next recession is dependent on the level of economic growth at that time. As I stated earlier this week:

“When looking at historical time frames, one must not look at averages of all rate hikes but rather what happened when a rate hiking campaign began from similar economic growth levels. Looking back in history we can only identify TWO previous times when the Fed began tightening monetary policy when economic growth rates were at 2% or less.
(There is a vast difference in timing for the economy to slide into recession from 6%, 4%, and 2% annual growth rates.)”

Courtesy of realinvestmentadvice.com

“With economic growth currently running at THE LOWEST average growth rate in American history, the time frame between the first rate and next recession will not be long.”

Given the reality that increases in interest rates is a monetary policy action that by its nature slows economic growth and quells inflation by raising borrowing costs, the only real issue is the timing.
As Sam Zell noted yesterday:

“I think this interest rate hike is too late, this economy is closer to falling over than it is to going up. I think there’s a high probability that we’re looking at a recession in the next twelve months.”

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chart: SPY Buying Pressure

This is the SPY vs Buying Pressure. 
This chart started to develop a recent pattern very similar to the pattern formed from December 2014-January 2015. 
"History doesn't repeat itself, but it does rhyme" - Mark Twain
The two red horizontal arrows indicate a double top pattern. 
The green vertical arrow shows where the SPY and the Buying Pressure both bottomed on the same day subsequent to the double tops.
The red trend line with a yellow circle at the bottom indicates when the down trend line was broken to the upside.
The blue arrow shows where the green arrow bottom was tested.  The second blue arrow on the right side of the chart shows where another test of the bottom may occur if this entire pattern is going to repeat again.

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After the Fed Rate Hike

The cycles suggested a high in the Dec 16-19 time period from the Dec 14th low and so far, that is what we got.


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chart: SPY 4min chart nailed it

Yesterday the SPY 4min chart was posted and there were a few buy and sell signals on that chart.  The last signal was a buy signal in the afternoon.  That signal caught the large gap up opening.  THe DJIA Futures at the time this is being written is +159.0

See yesterdays chart at the following link
http://stks.co/s3KAs

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RYNVX increased in Market Cap

Last posted on December 1,2015
Updates in BLUE - RYNVX inched closer to an extreme reading

RYFXX - Rydex US Government Money Market
RYNVX - Rydex Nova Fund Investor Class (Long Fund)
RYURX -  Rydex Inverse S&P 500® Strategy Fund Investor Class (Inverse Fund)

RYFXX   3-10-09   $1,367Mil   3-10-15   $655Mil   9-9-15   $1,434Mil
                                                                                   9-14-15  $1,451Mil    
                                                                                 10-26-15    $862Mil
RYNVX  3-11-09   $21.96 Mil  5-14-15    $177Mil   9-4-15       $53Mil 
                                                                                    9-14-15      $52Mil
                                                                                  10-26-15    $140Mil
                                                                                  11/27/15     $182Mil
                                                                                  12/10/15     $187.44
RYURX   3-9-09        $353Mil   5-4-15   $58.34Mil   9-9-15    $148Mil
                                                                                    9-14-15   $172Mil
                                                                                  10-26-15   $117Mil

Note that in March 2015 and in May 2015 the stock market made highs.  The RYNVX is now at an extreme.  It is at a recovery extreme high in market cap at $187.44Mil. since March 11,2009.

This displays the complacency in the market...

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STIX Indicator Update

An indicator that is not in most platforms is STIX

Definition of STIX

By Investopedia
A short-term trading oscillator that compares the amount of volume flowing into advancing and declining stocks. The STIX oscillates around the 50 level, with values over 50 generated when advancers outnumber decliners, and values less than 50 resulting when advancers are less than decliners. The trading range for the STIX is generally between 42 and 58, with levels below 42 indicating extremely oversold conditions, and levels above 58 denoting extremely overbought conditions.

Rules:
1- If STIX gets as low as 45, the market is almost always a buy, except in a raging bear market.
2- The market is fairly overbought if STIX rises to 56; and except in a new bull market , it's wise to sell if STIX should go over 58.
NOTE - Low of 28 & High of  69 were both made in 1932.

At the close yesterday the STIX was 41.1 at 202.90 in the SPY

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Past performance is not indicative of future results

chart: TNA 60min chart signals

Courtesy of TradeStation

Indicator signals are highlighted in white on this chart.  For some shorter term traders you can see other opportunities in between the longer signals.

Have a plan to enter and exit the market before you make a trade.  It is not wise to trade based on emotions.  Reward to risk ratio is common at 3:1.  Trade based on your risk tolerance and use money management wisely.  If you are new to trading there are many trading rules that you can find online.  Find them and use the ones that are right for you.

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Past performance is not indicative of future results

chart: SPY 4min chart signals

Courtesy of TradeStaion

Indicator signals are highlighted in white on this chart.  Have a plan to enter and exit the market before you make a trade.  It is not wise to trade based on emotions.  Reward to risk ratio is common at 3:1.  Trade based on your risk tolerance and use money management wisely.  If you are new to trading there are many trading rules that you can find online.  Find them and use the ones that are right for you.

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Past performance is not indicative of future results

charts: By Chris Carolan & a ST cycle update

Courtesy of Chris Carolan

Courtesy of Chris Carolan

What is interesting is that both of the charts above indicate a bottom around Dec 24th.  One chart is based on the tidal waves and the other lunar events.  But as we know tidal waves are a function of the moon's gravitational pull.  So they are probably somewhat related.

Another interesting piece is that the Short Term Cycle Update posted on Nov 30,2015 also indicated volatility until Dec 24, 2015.  Below is another update

The following was posted on November 30,2015
Today's comments are in Blue

Short term details:(every date is +/-)

Dec 5th low  The low came a bit early on Dec 3rd

The short term and intermediate term cycles are suggesting a bottom sometime in late November to early December.   These dates have now extended slightly into December.   As of today this bottoming process has extended to at least last Friday Dec 11th.

 

Short term cycles suggest some volatility from Dec 5-7th to Dec 24th.  A high came in of Dec 7th and then catapulted down into last Friday Dec 11th

The cycles suggest several dates to watch for possible turns.  

They are Dec 9, 11, 13, 14, 16-19 and the 24th.    A lot of energy and volatility came in on Dec 9th and Dec 11th and both were significant.    Dec 16-19 could be a high and Dec 24th a low as suggested by the short term cycles and in Chris Carolan's charts at the top of this page.

 

Of course these dates are +/-.  

From Dec 24th the cycles have an upward bias into January 7-14.

 

More on both the short term and intermediate term cycles as we get through some of these dates...

 

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chart: SPX & RYDEX Ratios

Courtesy of StockCharts.com

Look at the purple oval highlights on this chart is self explanatory.

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chart: 10Day Summation of Highs-Lows

For the first time in a while the 10Day Summation of Highs - Lows has made a lower low.
Up till now the chart was in an up trend with higher highs and higher lows.

This along with the previous post of weaker Buying Pressure may be evidence of a stock market that is trying to go lower.  How low though is not known.

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chart: SPY's Weak Buying Pressure Continues

Today the Buying Pressure chart made a new low of 6.  It broke the June 2015 low of 7.  This chart has been showing a decline in buying pressure since it made a top with the SPY in early November 2015.

Although the stock market is nearing an OS condition, this chart indicates market weakness until some positive divergence that may be needed to indicate a move up in the market.

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chart: SPY Buying Pressure

The top window is the SPY.  The bottom window is Buying Pressure.  As you can see the buying pressure made a top with the SPY in early November.  When the stock market pulled backed into mid month and then rallied, the buying pressure continued to fall.  In fact, just yat yesterdays close, the buying pressure broke below its September low and is currently sitting at its June level.  This chart has a history of setting up positive and negative divergences and tends to lead the stock market.

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Past performance is not indicative of future results

chart: DIA update

Courtesy of Chaikin Analytics

Note the vertical line at the November mod month low.   While the DIA (DJIA) rallied from that low, the CMF did not rise with that rally which is typical during a rally.  Also the RS faded over that same time period.  This is not what you would like to see during a robust stock market rally.

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chart: Find of the Day - SNX

Courtesy of Chaikin Analytics

Mkt Cap $3.7Bil
Trend - strong
Industry - strong
MA - above Chaikin's proprietary MA (tan line)
CMF - strong
OB/OS - in OS area
RS - strong
Chaikin PG - very bullish

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chart: Market Buying Pressure

Here we have the SPY in the top window and Buying Pressure in the bottom window.  The long white lines show the long divergences between the two.  The green trend line displays a bullish bias in the SPY price chart and the red line displays the lack of conviction (lack of buying pressure) in the SPY price rise.

In the past, buying pressure tops before price and bottoms before price. So in many cases the buying pressure has been a leading indicator of price.

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Past performance is not indicative of future results

RYNVX recovery in Market Cap

Last posted on October 26,2015
Updates in BLUE - RYNVX inched closer to its extreme readings

RYFXX - Rydex US Government Money Market
RYNVX - Rydex Nova Fund Investor Class (Long Fund)
RYURX -  Rydex Inverse S&P 500® Strategy Fund Investor Class (Inverse Fund)

RYFXX   3-10-09   $1,367Mil   3-10-15   $655Mil   9-9-15   $1,434Mil
                                                                                   9-14-15  $1,451Mil    
                                                                                 10-26-15    $862Mil  -$589Mil
RYNVX  3-11-09   $21.96 Mil  5-14-15    $177Mil   9-4-15       $53Mil 
                                                                                    9-14-15      $52Mil
                                                                                  10-26-15    $140Mil +$88Mil
                                                                                  11/27/15     $182Mil +$42Mil 
RYURX   3-9-09        $353Mil   5-4-15   $58.34Mil   9-9-15    $148Mil
                                                                                    9-14-15   $172Mil
                                                                                  10-26-15   $117Mil  -$55Mil

Note that in March 2015 and in May 2015 the stock market made highs.  The RYNVX is now at an extreme.  It is at a recovery extreme high in market cap at $182Mil. since March 2009.

This displays more complacency in the market...

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Past performance is not indicative of future results

First Day Gains

A re post from October 28,2015
Tomorrow is Tuesday December 1,2015

DJIA gains more on first day than all other days

Over the last 15 1/4 years the Dow Jones Industrial Average has gained more points on the first trading days of all months than all other days combined. While the Dow has gained 5481.72 points between September 2, 1997 (7622.42) and December 31, 2012 (13104.14), 5323.19 points were gained on the first trading days of these 184 months. The remaining 3674 trading days combined gained just 158.53 points during the period. This averages out to gains of 28.93 points on first days, in contrast to only 0.04 points on all others. See Table 1.
Note that September 1997 through October 2000 racked up a total gain of 2632.39 Dow points on the first trading days of these 38 months (winners except for seven occasions). But between November 2000 and September 2002, when the 2000-2002 bear markets did the bulk of their damage, frightened investors switched from pouring money into the market on that day to pulling it out in fourteen months out of twenty-three. This netted a 404.80 Dow point loss. The 2007-2009 bear market lopped off 964.14 Dow points on first days in 17 months from November 2007 to March 2009. First days had their worst year in 2011, declining seven times for a total loss of 644.45 Dow points.
First days of June have performed worst. Triple digit declines in four of the last five years have resulted in the worst net loss. August is the second net loser. In rising market trends, first days perform much better as institutions are likely anticipating strong performance at each month’s outset. S&P 500 first days track the Dow’s pattern closely but NASDAQ first days are not as strong with weakness in April, August, and October.

Courtesy of Jeffrey A. Hirsch

 For more information contact
 JEFFREY A. HIRSCH, editor-in-chief of the Stock Trader's Almanac and Almanac Investor newsletter, and the author of The Little Book of Stock Market Cycles (Wiley, 2012).
 www.stocktradersalmanac.com

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Past performance is not indicative of future results

Milton Berg on Commodities

Milton Berg on Commodities

Click on this link for the BloombergTV interview 

http://bloom.bg/1XsucEb


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Past performance is not indicative of future results

Short & Intermediate Term Cycles Update

The following was posted on November 9,2015
Today's comments are in Blue

Short term details:(every date is +/-)

Nov 2nd high     A high was made on Nov 3rd.  (note the dates are +/-)  As of today Nov 3rd was the high

Nov 4-6 some kind of consolidation or a bias up into Nov 6     We are still in the Nov 4-6 window, but, it does look like we had a classic turn around day this morning.  The market drifted higher to DJIA + 42 and is currently DJIA -76. The suggested consolidation is what we had with an attempt on Nov 5th to rally up to the Nov 3rd high, as described above, but that attempt failed.

Nov 9th low   As of the time of this writing, the DJIA is down -220.44 and the cycles suggested a low for today.

Nov 12th high  SPY High was on Nov 11th

Nov 17th low   SPY Low was on Nov 16th

Nov 22nd high  SPY high was on Friday Nov 20th

Dec 5th low  This low date has expanded now to Dec 5-7

 

The short term and intermediate term cycles are suggesting a bottom sometime in late November to early December.   These dates have now extended slightly into December.  Short term cycles suggest some volatility from Dec 5-7th to Dec 24th.   The cycles suggest several dates to watch for possible turns.  They are Dec 9, 11, 13, 14, 16-19 and the 24th.   Of course these dates are +/-.  

From Dec 24th the cycles have an upward bias into January 7-14.

 

Intermediate term cycles suggest a bias to the upside into the early to mid part of 1Q2016.  Then a correction into the mid to late part of 2Q2016. 

 

More on both the short term and intermediate term cycles as we get through some of these dates...

 

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Past performance is not indicative of future results

chart: May S&P Sets All Time High

When the May S&P Sets an All Time High
By Wayne Whaley
May 13, 2014

Since 1950, the S&P is 46-18 over the seven month June-December time frame for an average/median gain of 4.54/5.88%. On May 12, 2014, the S&P closed at an all time high of 1896.65. In those 20, post 1949, years in which an all time high was set during the month of May, the last seven months of those calendar years has done much better than the norm, going 17-3 for an average/median return of 8.09/8.04% Eight of those 20 years had +10% June-December while a double digit loss has never occurred in the seven months following an all time May High.

Courtesy of Wayne Whaley

Based on the above findings of Wayne Whaley through 2013, let's try and see how this data might be able to help us in 2015.
1) All of the years are when there was an All Time High in May

So what is different this year? An August sell off and a big October rally.  Then let's look and see what years come closest to a May All Time High, an August sell off and a big October rally. 

2) There are two years that are close to an August sell off.  1986 & 1990
3) Big October rallies. 1985, 1986, 1999 & 2013
4) Which year noted in #3 and #4 above comes closest to the events in 2015 ?
1986 seems to come closest.  If you were to pick 1990 because of the August sell off instead of the September sell off in 1986, the balance of the year was still off -8.58%.

The other two years, 1999 & 2013, although they did well for the balance of the year, they were not picked because they did not have a material sell off in August & September or June & July either.

2014 - What happened for the balance of this year?
1) May All Time High
2) 2014 had both an October correction in the first half of the month and a big rally in the second half of the month that allowed October to close with a small gain.
3) The stock market did not gain much traction between Oct 31st and Dec 31st  with some similarities to the second half of 2015.   2014 did pick up approx 8% from May 12,2014 to December 31,2014.

Conclusion:
Today is Nov 17,2015.  What might happen between today and the end of the year?   So far Nov 2015 has a small loss to date.   
Scenario #1 - If we pick a year in the chart above that most resembles the May, Aug/Sept & Oct periods in 2015, that year is 1986.  Going forward the total of Nov & Dec in 1986 was flat.   
Scenario #2 - The short term cycles suggested a low today and instead the low occurred with the pre market futures yesterday morning.  Going forward the cycles suggest a, high 11/22+/-, low 12/5+/-, then some backing and filling in Dec with a bias up into year end.

So both of these scenarios do not suggest a big year end rally, unless there is a scenario #3 of course.

NOTE - The DJIA & the S&P500 are both  currently lower than their May 2015 highs.  See the chart above, this also happened in 1986, -2,09% from June - December 1986.

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Past performance is not indicative of future results

chart: SPX 90min

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Past performance is not indicative of future results

chart: % of DJIA Stocks above 10DMA

Courtesy of IndexIndicators.com

Some kind of a bounce will try to work off this oversold condition.   The short term cycles are suggesting a low on 11/17/15 +/-.    Click on this link for the full explanation  
http://justsignals.blogspot.com/2015/11/short-intermediate-term-cycles.html


Keep following JustSignals using Twitter, @StockTwits or Follow By Email.  
Just submit your email address in the box on the Blog homepage
This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions. 
Past performance is not indicative of future results