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

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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.

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


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.


 

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.