At the First Yellow Vertical Bar... What's next?

The following, below, was posted on 2/22/2019.  
BUT, we are now at the first yellow vertical bar.  This is where the first real, but shallow, corrections occurred in 2003,2009 & 2016.  It should be watched carefully as our Picasso Composite Cycle (PCC) date is almost here.  In the last PCC update posted on 3/4/2019 stated, the PCC date suggests a high in late March.  We are now in the beginning of that window.  So charts should be watched to see if indicators are breaking down and or showing any negative divergence.

Above are the charts from the 2003 low, 2009 low & 2016 low.  In each of these three lows there was a Breadth Thrust similar to the Breadth Thrust that we saw off of the Dec 2018 low.  So these charts were interesting to review for any similarities.  If any were found, then maybe we exposed some insight into how this rally may unfold as well.

There are 5 vertical yellow highlights.  The first one shows where highs were noticed in each of the three years.  It is interesting that they were all at about the three month mark!  The second, third, fourth & fifth yellow highlights show where some small lows occurred after the high at the first yellow highlight.

In 2003 lows were made in and around the second, third & fourth yellow highlights before the market continued higher.
In 2009 lows were made in and around the second & third yellow highlights before the market continued higher.
In 2003 lows were made in and around the second, third, fourth and before the fifth yellow highlights before the market continued higher.

In summary, "if" history is any indication how the 2019 rally will play out, then we may expect a high around late March +/- and then a low to develop in the next 2-8 weeks before the market continues higher.

“History doesn't repeat itself but it often rhymes,” - Mark Twain

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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.

Weekend Update & Picasso Cycle

Picasso Composite Cycle (PCC) has been very good in 2018.
It suggested:
- January 2018 high,
- June/July 2018 low
- Early October 2018 high
- Late December 2018 low

Once we are in the window of a Picasso Composite Cycle date, we then look for a change in trend on our charts for confirmation.  When we did that in 2018 the swing trades were very good with nice double digit gains instead of a loss as in the indexes.

Summary of 2018 PCC Performance -  https://bit.ly/2Giz648

Compare the Bottoms 2018, 2003, 2009, 2016 -  https://bit.ly/2Eph7XB
2003, 2009 & 2016 had a breadth thrust after their respective bottoms similar to Dec 2018
Note the patterns.  Some chop develops after 2 months and into a 3 month high.  Then some volatility before a move higher.

If you follow @JustSignals on Twitter, you would have seen this post on Feb 22,2019

If you follow @JustSignals on Twitter, you would have seen a post on Dec 23,2018 about going long on the next up day.

If you went long the SPY on Dec 26,2018 at the average price of 239.97, then as of Friday March 1,2019 close at 280.42, the gain was 16.8%.

What is Picasso suggesting now?
The Cycle is shifting from a high around early April +/-  to now a high around late March +/-.  Always note the "+/-" as there are no guarantees!

This is only a suggested area for a change in trend, so we keep watching our charts for confirmation even when approaching this time period.

Watch for the next Picasso Cycle Composite Date and any further comments on the Picasso Cycle.


This year, 2019, maybe the last year that the Picasso Composite Cycle Dates will be posted and discussed on this Blog.  In lieu of posting this information here, this information may be posted on a subscription site.

*For those interested in joining a subscription site for the Picasso Composite Cycle dates, please leave a comment at the bottom of this post.  Thank you! 


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.

Compare Bottoms - 2018, 2003, 2009, 2016

Above are the charts from the 2003 low, 2009 low & 2016 low.  In each of these three lows there was a Breadth Thrust similar to the Breadth Thrust that we saw off of the Dec 2018 low.  So these charts were interesting to review for any similarities.  If any were found, then maybe we exposed some insight into how this rally may unfold as well.

There are 5 vertical yellow highlights.  The first one shows where highs were noticed in each of the three years.  It is interesting that they were all at about the three month mark!  The second, third, fourth & fifth yellow highlights show where some small lows occurred after the high at the first yellow highlight.

In 2003 lows were made in and around the second, third & fourth yellow highlights before the market continued higher.
In 2009 lows were made in and around the second & third yellow highlights before the market continued higher.
In 2003 lows were made in and around the second, third, fourth and before the fifth yellow highlights before the market continued higher.

In summary, "if" history is any indication how the 2019 rally will play out, then we may expect a high around late March +/- and then a low to develop in the next 2-8 weeks before the market continues higher.

“History doesn't repeat itself but it often rhymes,” - Mark Twain

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.

Martin Pring and the RASI

Courtesy of Twitter

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.

Summary of 2018 PCC Performance

Performance for 2018
SPY
12/29/17  266.86  to 12/31/18  249.92  was a loss of 6.35%

Picasso Composite Cycle Dates
12/29/17   266.86     long from the previous cycle trend change date
1/13/18     277.92     suggested high
6/30/18     271.28     suggested low
9/25/18     290.75     suggested high
12/23/18   240.70     suggested low
12/31/18  249.92     end of the year and long into the next cycle trend change date

Performance
12/29/18 - 1/13/18     long SPY   4.14%
1/13/18 - 6/30/18       long SH     2.39%  (SH is a 1x leverage inverse ETF)
6/30/18 - 9/25/18       long SPY   7.18%
9/25/18 - 12/23/18     long SH   17.21%
12/23/18 - 12/31/18   long SPY   3.83%

The Picasso Composite Cycle Dates had a gain of 34.75%

This was far better than the 6.35% loss in the SPY.
(SPY is the proxy for the S&P 500 index)

NOTE that the suggested trend change dates generated from the Picasso Composite Cycle (PCC) are not to be used to buy and or sell without the confirmation of chart indicators.  The raw dates were used in the example above just to see how it would have done without such confirmations.  The PCC can and did have some losses in a 34 year back test.  Approximately 15% of the dates resulted in losses.  Still, the PCC dates out performed the indexes with a CAGR of 27.73% using both the SPY and the SH, as in the example above.  Note that taxes were not taken into consideration.  So, this could have been the result of a non taxable retirement account.
If confirmation is used in conjunction with the PCC dates, the results will probably not be the same as the results in the example above.

Here you can see approximately where each PCC date occurred

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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.

First Half of a Decade Low

Going back 100 years and looking for:
1) "THE" low in the first half of a decade
2) Starting each decade search with the year ending in "1" and ending the search with the last year ending in "0" (1-10)

The following observations were made:

Lows in the first half of a decade were made in:
1921 with an 8 year rally into the 1929 high
1932 with a 5 year rally into the 1937 high 
1942 with a 4 year rally into the 1946 high, which some might call a consolidation and the rally continued way up into the 1966 high, with other consolidations along the way
1951 with a 5 year rally into the 1956 high, which some might call a consolidation and the rally continued way up into the 1966 high, with other consolidations along the way
1962 with a 4 year rally into the 1966 high
1974 with a 2 year rally into the 1976 high
1982 with a 5 year rally into the 1987 high
1991 with an 8 year rally into the 1999 high (some indexes made highs in 2000)
2002 with a 5 year rally into the 2007 high
2011 with a 7 year rally into the 2018 high, SO FAR !  Maybe this will also turn into an 8 year rally as it did from 1921-1929 and from 1991-1999 and the stock market makes an ATH in 2019...
Based on the above, 66% chance of a high in 2019...

So what did this tell us?
1) Most of the lows made in the first half of a decade were major lows with a big rally to follow
2) Only two lows were revisited. The 1921 low was revisited by 1932 and the 2002 low was revisited by 2009.
3) That is 2x out of 10x for an 80% probability never to see that low again
4) Lows that occurred in the years ending in a "1" have a greater probability of a longer subsequent rally afterwards, 7-8 years or maybe longer as in 1951
5) Lows that occurred in the years ending in a "2" seem to have more predictability with a 4-5 year rally afterwards
6)  The 20 year cycle appears to be important in the recent past.   Lows were made in 1942, 1962, 1982 and 2002.  So if history repeats will we have another major low in 2022?  Or will it be in 2021 because most of the lows, with the exception of 1974, occurred in either the first or second year of the decade.
7) The last comment to be made, since major lows have been made in the first half of each of the decades over the last 100 years, did we make a top in 2018 or will we be making a higher top in 2019?  Or even in 2020?

 "History does not repeat itself but it often rhymes" - Mark Twain


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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.

30 Year Nominal Cycle

Going back as far as 1886, five times the 29-30 year cycle was found accompanied by financial hardship.
Below are the 4-5 year periods within the 29-30 year cycle that appear to be important times in the past.   Each of these 4-5 year periods are 29-30 years apart.

1899-1903
Panic of 1901
The DJIA fell 39%

1928-1933
The Great Depression
The DJIA fell 90%

1958-1962
The Recession of 1958, or
The Eisenhower Recession
The DJIA fell 18%
1961 JFK Recession
The DJIA fell 27%

1987-1991
The 1987 Crash
The DJIA fell 37%

2017-2021
We are currently in this window and the fundamentals are flashing a caution light.  The Picasso Composite Cycle dates posted in this Blog, confirmed by the technicals gave a buy in late Dec 2018.   So for now, it is risk on...
At some future date, this may all turn if history is going to give us any guidance once again and it might.  But, which "risk off" signal will be THE one?

"History does not repeat itself but it often rhymes" - Mark Twain


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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.


 

Weekend Update & Picasso Cycle

Picasso Composite Cycle has been very good in 2018.
It suggested:
- January 2018 high,
- June/July 2018 low
- Early October 2018 high
- Late December 2018 low

If you follow @JustSignals on Twitter, you would have seen a post on Dec 23,2018 about going long on the next up day.

Once we are in the window of a Picasso Composite Cycle date, we then look for a change in trend on our charts for confirmation.  When we did that this year the swing trades were very good with nice double digit gains instead of a loss as in the indexes.

There are many ways to play this.
1- At lows:
   a) look for stocks with very good relative strength.  Stocks that did not correct as much as other stocks during the correction.  These stocks "should" be expected to rally better than weaker stocks.  
   b) play the index ETF's, like SPY 1x, SSO 2x, SPXL 3x.  Note that the leveraged ETF's are more risky that the non-leveraged ETF's.

2- At highs:
   a) not interested in shorting stocks, but, one can look for stocks with very weak relative strength.  Stocks that did not rally as much as other stocks during the rally.  These stocks "should" be expected to correct more than stronger stocks. 
 
   b) play the index ETF's, like SH 1x, SDS 2x, SPXU 3x.  Note that the leveraged ETF's are more risky that the non-leveraged ETF's.

What is Picasso suggesting now?
The Cycle is shifting from a high in mid to late March  to now a high around early April +/-.  Always note the "+/-" as there are no guarantees!

This is only a suggested area for a change in trend, so we keep watching our charts for confirmation even when approaching this time period.

Watch for the next Picasso Cycle Composite Date and any further comments on the Picasso Cycle.





This year, 2019, maybe the last year that the Picasso Composite Cycle Dates will be posted and discussed on the Blog. 


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.

IBM daily chart

Courtesy of ChaikinAnalytics.com

In the daily chart of IBM above, note that in the last three earnings releases that IBM went up, then sold off in the days after.
Will this happen again?

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.

Picasso Cycle Update

The following was posted on December 14,2018

What is Picasso suggesting now?
The Cycle is shifting again from a low in late Nov / early Dec to now a low around the end of Dec +/-.

In addition, if you follow @JustSignals on Twitter, you would have seen a post about going long on the next up day.

The Picasso Cycle low was suggested to be around the end of December and the indicator that suggested to buy on the next up day was able to catch a buying opportunity on Wednesday December 26,2018.

So far the gain for the S&P 500 is 12.1%

Watch for the next Picasso Cycle date and any further comments on the Picasso Cycle.


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.

Solar & Lunar Eclipse

On January 4,2019 there was a post on the Eclipses used by Paul Macrae Montgomery (RIP).
The following was written.

The Solar Eclipse will occur on Sunday January 6th.
The Lunar Eclipse will occur on Monday January 21st.

The Solar Eclipse seems to be a bullish event.
With the DJIA advancing 746.94 points today, it wasn't a total surprise including the recent rally off the December 2018 low.

The Lunar Eclipse seems to be a bearish event.
But that will remain to be seen.

Based on the rally this month, it is obvious that the original theory during the period between the Solar and Lunar Eclipse inverted and Monday January 21,2019 may turn out to be a high.  Note that the market is closed on Monday 1/21/19 for Martin Luther King Day.


CORRECTION:
The Solar Eclipse generates a bullish event between the Solar & Lunar Eclipses.
Then the Lunar Eclipse generates a bearish event after its Eclipse. 
We will see what happens this time after the Lunar Eclipse.
Since we are in a bullish phase of the Picasso Cycle, if a correction does materialize after the Lunar Eclipse, it may not be similar to the last one.  During the last one the Picasso Cycle was in a bearish phase.  So, IMHO, that maybe why it was more severely bearish at that time.  Let's wait and see and take our cue from the market.   


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.

BAM - Break Away Momentum

The following was posted on Twitter
By Mark Ungewitter
@mark_ungewitter

So who is Walter Deemer?
Walter Deemer began his Wall Street career in July, 1963 as a Merrill Lynch research trainee. In April, 1964, he moved to their Market Analysis Department, where he worked directly under Bob Farrell, and he has been a full-time market analyst ever since. 

The full article can be found at the following link:
 http://www.walterdeemer.com/bio.htm

BreakAway Momentum 101
The following link gives an explanation of this indicator
https://www.walterdeemer.com/bam.htm

***Jan. 9,2019 is the 23rd BAM since 1945


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.

Volume Oscillator Signal

Below is a chart of the Volume Oscillator from Dec 2012 to the present.  Yesterday this indicator hit 112.  Note that when this happened since Dec 2012 the market continued to rise.  This is indicated by vertical yellow lines.  It was different in each case though,

Interesting facts:
1) Mid term years are the best and the market made a 2018 low in December in the 2nd year of the Presidential Cycle.  The best market gains have been made from the low in the 2nd year of the Presidential Cycle to the high in the 3rd year of the Presidential Cycle.

2) A Zweig Breadth Thrust (ZBT) signal occurred this week.  For more information on the ZBT  please feel free to use the following links:
https://bit.ly/2M13DDz
https://bit.ly/2TywOjR

3) Picasso Composite Cycle Dates - Posted on this Blog.
In 2018 this cycle suggested:
1) January high
2) Midyear low
3) September/October high.
So far it has been good and when used with the 180min chart or the daily charts, depending on your preference and risk tolerance,  the entry and exit points have been good.
Now this Cycle is suggesting a March 2019 high +/-
Note a "+/-" is always indicated because as we get closer to the suggested Cycle date the amplitude of the cycle and the suggested date of the cycle may change.  In the past there were times when it did change. 

We know that markets do not move either straight up or straight down.  If there is a pause to refresh the probability is that we "might" just continue higher for a little while.  How long is a little while?  Well we don't know just yet.  Investors and traders vote with their wallets and that is reflected in the  price charts.  So the price chart will be the handwriting on the walls to read.

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.

SPY daily chart

In the SPY daily chart below you can see that the CMF stayed in the red on the last rally up from the December low.  Relative Strength declined when you would want to see it stable or rise during a move such as the one we recently had.  The rising wedge price pattern is also troubling along with the SPY being in an OverBought area on this chart.   Let's see what happens Friday morning Dec.11,2019 with any potentially surprising news.

Courtesy of ChaikinAnalytics.com

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.

SPY & SH daily charts

The SPY daily chart below suggests that a rising wedge pattern maybe developing.
Price appears to be up against the lows in the early part of the year. (yellow line)
Also price is getting closer to the white trend line from 3 low points.

This SPY daily chart below from ChaikinAnalytics is short term OB.

This SH daily chart below from ChaikinAnalytics is short term OS.

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.

Paul Macrae Montgomery

Paul Macrae Montgomery (RIP) was innovative and was able to think out of the box when it came to human behavior and financial behavior in the markets.

There are many links online where you can read more about Paul.
Each one is very interesting and informative.

Here is a link to one article written in Barron's
https://bit.ly/2R9iDVQ

One item of interest that Paul followed was the Lunar and Solar Eclipse.
This is timely to mention now because they are coming up now in January 2019.

The Solar Eclipse will occur on Sunday January 6th.
The Lunar Eclipse will occur on Monday January 21st.

The Solar Eclipse seems to be a bullish event.
With the DJIA advancing 746.94 points today, it wasn't a total surprise including the recent rally off the December 2018 low.

The Lunar Eclipse seems to be a bearish event.
But that will remain to be seen.

In the prior post it was noted that the Picasso Cycle bottomed in late December and the next change in trend is suggested to be in March 2019 +/-.  As in the past these dates can sometimes change as we get closer to them.

So far, the market bottomed in the intra-day low on Dec 26,2018.  So we will see if that low will be challenged in this upcoming event of the Lunar Eclipse.

***NOTE: On occasion these two dates might invert.  Be aware of this.  


 ***Keep in mind that nothing works 100% of the time!

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.