DJIA cycle dates to watch

DJIA
Cycles look like a consolidation period into May 21 with a slight bias to the upside, no real short term directions suggested by the cycles although some may develop along the way.
May 21   poss top
June 2-3   poss  low
June 18-19   poss top
July 29   poss low

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Short Term Forecast

Review of the last Short Term Forecast Dates Made March 22nd

- Forecast Trend Change Dates are (+/-)

*) March 19-25
1) March 29 to April 3
2) April 5-7
3) April 12-13

COMMENTS

March 19 to 25 -DJIA topped on March 23rd

March 29 to April 3 - DJIA topped on March 30th and bottomed on April 1st - a tricky one

April 5 to 7 - DJIA stalled on April 6th

April 12 to 13 - DJIA at the time of this writing topped on April 13th

 

Following cycles has been good to use as a guide or as a potential future road map, but, other tools must always be used for confirmation of any forecast trend change date.  

 

NEW SHORT TERM FORECAST DATES

- Forecast Trend Change Dates are (+/-)

The forecast dates from this week to the 2nd or 3rd week of May are not easy to interpret.
More time is needed to evaluate this time period due to what is perceive to be many cross currents and a possible sideways consolidation period.
More on this to be posted in a few days.

Since cycles do not distinguish between trading days and calendar days, the cycle dates may come out on Holidays or weekends.  So the dates suggested that do fall on such days are to be used as a window.   So, as always, other tools must always be used for confirmation of any forecast cycle trends.  All forecast dates will still be noted with a "+/-" because the cycle dates are not always as perfect as we would like them to be.  Although they have been pretty accurate.   

Intermediate Term Forecast Trend Change Dates

Intermediate term - 

The following was posted on March 22nd - 

"at this time the Short Term Cycles and the Intermediate Term Cycles are not in sync. The Intermediate term cycles suggest that the DJIA maybe turning up in the February/March time frame into mid 2015 +/-.

After reviewing the short term cycles, it is likely that the DJIA may drop into late March or early April" 

After an early February bottom the DJIA grinded with a bullish bias with small pullbacks in late March and early April as forecast.

From here the Intermediate cycles still call for some more bullish bias into mid 2015 +/- and that could mean +/- a month or so.

 

*** Indicators and oscillators must be watched for moves in the market because we are at a time where sentiment is optimistic and dumb money is buying and smart money is selling.  

In the past this combination has been a catalyst for a correction.  

 

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A hint from the VIX

This is a chart of the daily VIX courtesy of eSignal. 
Since October 2014 we have had declining tops as indicated by the trend line.
When a break of this trend line occurs and drop in the stock market occurs.
The amount of the drop is hard to forecast.
So keep an eye on this one !

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Short Term Forecast

Review of the last Short Term Forecast Dates Made Feb 15th

- Forecast Trend Change Dates are (+/-)

1) March 3-5
2) March 7-11
3) March 13-15
4) March 19-25

COMMENTS

Feb 28th - At this point the DJIA made an intraday high on Feb 25thand this was the high and right in the forecast window.

March 3 to 5 - not much happened here.

March 7 to 11 - DJIA bottomed on March 11th.

March 13 to 15 - Volatility in this window although the DJIA made anothe bottom on March 13th.

March 19 to 25 - Cycles suggest a top in this window

Following cycles has been good to use as a guide or as a potential future road map, but, other tools must always be used for confirmation of any forecast trend change date.  

 

NEW SHORT TERM FORECAST DATES

- Forecast Trend Change Dates are (+/-)

1) March 29 to April 3
2) April 5-7
3) April 12-13

Since cycles do not distinguish between trading days and calendar days, the cycle dates may come out on Holidays or weekends.  So the dates suggested that do fall on such days are to be used as a window.   So, as always, other tools must always be used for confirmation of any forecast cycle trends.  All forecast dates will still be noted with a "+/-" because the cycle dates are not always as perfect as we would like them to be.  Although they have been pretty accurate.   

Intermediate Term Forecast Trend Change Dates

Intermediate term - at this time the Short Term Cycles and the Intermediate Term Cycles are not in sync. The Intermediate term cycles suggest that the DJIA maybe turning up in the February/March time frame into mid 2015 +/-.

After reviewing the short term cycles, it is likely that the DJIA may drop into late March or early April.

Indicators and oscillators must be watched for moves in the market because we are at a time where sentiment is optimistic and dumb money is buying and smart money is selling.  In the past this combination has been a catalyst for a correction.  A correction is over due and one would be healthy at this time and it would be a launching pad for another leg up.

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Short Term Forecast

Review of the last Short Term Forecast Dates Made Feb 15th

- Forecast Trend Change Dates are (+/-)

1) Feb 18th 

2) Feb 28th

 

COMMENTS

Feb 8-13th -  The DJIA had a minor top on Feb 6th (Feb 8th was a Sunday) and the DJIA was not much higher on Feb 13th.

Feb 18th - Feb 18th was a non event.  The market kept pushing higher.

Feb 28th - At this point the DJIA made an intraday high on Feb 25th

 

Following cycles has been good to use as a guide or as a potential future road map, but, other tools must always be used for confirmation of any forecast trend change date.  

 

NEW SHORT TERM FORECAST DATES

- Forecast Trend Change Dates are (+/-)

1) March 3-5
2) March 7-11
3) March 13-15
4) March 19-25

 

Since cycles do not distinguish between trading days and calendar days, the cycle dates may come out on Holidays or weekends.  So the dates suggested that do fall on such days are to be used as a window.   So, as always, other tools must always be used for confirmation of any forecast cycle trends.  All forecast dates will still be noted with a "+/-" because the cycle dates are not always as perfect as we would like them to be.  Although they have been pretty accurate.   

Intermediate Term Forecast Trend Change Dates

Intermediate term - at this time the Short Term Cycles and the Intermediate Term Cycles are not in sync. The Intermediate term cycles suggest that the DJIA maybe turning up in the February/March (a bottom was made on Feb 2nd) time frame into mid 2015 +/-.

After reviewing the short term cycles, it is likely that the DJIA may drop into late Feb to mid March.  The market did not correct in the second half of Feb as the seasonal charts and cycles suggested.  

Indicators and oscillators must be watched for moves in the market because we are at a time where sentiment is optimistic and dumb money is buying and smart money is selling.  In the past this combination has been a catalyst for a correction.  A correction is over due and one would be healthy at this time and it would be a launching pad for another leg up.

 

 

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Past performance is not indicative of future results

Short Term Forecast

Review of the last Short Term Forecast Dates Made Jan 2nd

- Forecast Trend Change Dates are (+/-)

1) Jan 20-25th

2) Jan 28th

3) Feb 1-6th

4) Feb 8-13th

5) Feb 18th

 

COMMENTS

Jan 20-25th - The DJIA topped on Jan 22nd right in the trend change date window

Jan 28th -  The DJIA closing bottom occurred the next day

Feb 1-6th - The DJIA had a minor top on Jan 6th

Feb 8-13th - To be discussed in the next update

Feb 18th - To be discussed in the next update

 

Following cycles has been good to use as a guide or as a potential future road map, but, other tools must always be used for confirmation of any forecast trend change date.  

 

NEW SHORT TERM FORECAST DATES

- Forecast Trend Change Dates are (+/-)

1) Feb 18th 

2) Feb 28th

3) Additional dates will be given between Feb 18th and Feb 28th and the price pattern tells us how it decides to unfold.

 

Since cycles do not distinguish between trading days and calendar days, the cycle dates may come out on Holidays or weekends.  So the dates suggested that do fall on such days are to be used as a window.   So, as always, other tools must always be used for confirmation of any forecast cycle trends.  All forecast dates will still be noted with a "+/-" because the cycle dates are not always as perfect as we would like them to be.  Although they have been pretty accurate.   

Intermediate Term Forecast Trend Change Dates

Intermediate term - at this time the Short Term Cycles and the Intermediate Term Cycles are not in sync. The Intermediate term cycles suggest that the DJIA maybe turning up in the February/March time frame into at least mid 2015 +/-.

An earlier Intermediate term post on November 6,2014 stated, "cycles forecast at this time points up into mid to late November and then a down bias into December/January".  

The late November forecast turned out to be a top on Dec 5th and then the DJIA dropped into Dec 16-17.  It then rallied into a top on Dec 24-26 and then dropped again into a bottom on Feb 2nd.  The downward pressure forecast did occur, but, the DJIA displayed resilience. 

After reviewing the short term cycles, it is likely that the DJIA may drop into late Feb to mid March.  

The intermediate term cycles suggest that this may be the next and possibly the last entry point this year before a good rally.

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Past performance is not indicative of future results

US Dollar Futures Record Long Position

Courtesy of J. Lyons Fund Management, Inc./My401kPro.com

The vertical lines were added to make it easier to line up the extreme net long positions with the US Dollar Index.

Commercial Hedgers tend to sell into strength and buy into weakness, just the oposite of Non-Commercial Speculators.

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Short Term Forecast

Review of the last Short Term Forecast Dates Made Jan 2nd

- Forecast Trend Change Dates are (+/-)

1) Jan 8th +/-

2) Jan 13-17th +/-

3) Jan 21st +/-

 

COMMENTS

Jan 3rd - was a Saturday suggesting that Friday or Monday be the trend change days and it happened on Tuesday morning very close the the suggested dates

Jan 8th - the market rallied right into this trend change date

Jan 13-17th - so far the market bottomed on Friday Jan 16th in the suggested time period

Jan 21st - To be discussed in the next update

Following cycles has been good to use as a guide or as a potential future road map, but, other tools must always be used for confirmation of any forecast trend change date.  

 

NEW SHORT TERM FORECAST DATES

- Forecast Trend Change Dates are (+/-)
1) Jan 20-25th

2) Jan 28th

3) Feb 1-6th

4) Feb 8-13th

5) Feb 18th

 

Since cycles do not distinguish between trading days and calendar days, the cycle dates may come out on Holidays or weekends.  So the dates suggested that do fall on such days are to be used as a window.   So, as always, other tools must always be used for confirmation of any forecast cycle trends.  All forecast dates will still be noted with a "+/-" because the cycle dates are not always as perfect as we would like them to be.  Although they have been pretty accurate.   

Intermediate Term Forecast Trend Change Dates

Intermediate term - at this time the Short Term Cycles and the Intermediate Term Cycles are not in sync.  Therefore an update in the Intermediate Term Cycles will wait for more clarification before making any new suggestions.

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Past performance is not indicative of future results

Short Term Forecast

Review of the last Short Term Forecast Dates Made Nov 26th

- Forecast Trend Change Dates are (+/-)

1) Dec 6 +/-
2) Dec 11-14 +/-
3) Dec 16 +/-
4) Dec 25 +/-

 

Review of the last Short Term Forecast Dates Made Dec 17th

5) Jan 3rd +/-

COMMENTS

Dec 6th (Saturday) forecast the trading high on Friday Dec 5th.

Dec 11-14th had weakness into Dec 16th.

Dec 16th forecast the December bottom.

Dec 25th (Thursday/Christmas Day) forecast the next top on Friday Dec 26th.

Jan 3rd (Saturday) so far the market has fallen from Dec 26th into Jan 2nd.

Following cycles has been good to use as a guide or as a potential future road map, but, other tools must always be used for confirmation of any forecast trend change date.  

 

NEW SHORT TERM FORECAST DATES

- Forecast Trend Change Dates are (+/-)
1) Jan 8th +/-

2) Jan 13-17th +/-

3) Jan 21st +/-

 

The cycles from 1/3 to 1/17 suggests a possible choppy market, sideways market or a volatile period before a suggested rally into 1/21 +/-.

Since cycles do not distinguish between trading days and calendar days, the cycle dates may come out on Holidays or weekends.  So the dates suggested that do fall on such days are to be used as a window.   So, as always, other tools must always be used for confirmation of any forecast cycle trends.  All forecast dates will still be noted with a "+/-" because the cycle dates are not always as perfect as we would like them to be.  Although they have been pretty accurate.   

Intermediate Term Forecast Trend Change Dates

Intermediate term cycles forecast at this time suggests a down bias into January. 

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Past performance is not indicative of future results

 

Short Term Forecast quick update

On the Nov 6th post a forecast date of Nov 29th was made.  The DJIA topped on Nov 28th and then made a small marginal new high on Dec 5th before falling 900 Dow points. 
Then on the Nov 26th post a forecast date of Dec 16th was made.  The DJIA so far, posted it closing low on Dec 16th.

Please note the dates in the Nov 26th posts were as follows:
NEW SHORT TERM FORECAST DATES - Forecast Trend Change Dates are (+/-)
1) Dec 6 +/-
2) Dec 11-14 +/-
3) Dec 16 +/-
4) Dec 25 +/-

Since the next post will probably be made after the Holidays, here is the next forecast date:
5) Jan 3rd +/-

Happy Hanukkah, Merry Christmas and a Happy New Year !

Following cycles has been good to use as a guide or as a potential future road map, but, other tools must always be used for confirmation of any forecast trend change date.   

Since cycles do not distinguish between trading days and calendar days, the cycle dates may come out on Holidays or weekends.  So the dates suggested that do fall on such days are to be used as a window.   So, as always, other tools must always be used for confirmation of any forecast cycle trends.  All forecast dates will still be noted with a "+/-" because the cycle dates are not always as perfect as we would like them to be.  Although they have been pretty accurate.   

Keep following JustSignals using Twitter or Follow By Email.   

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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

SPY vs new Highs & new Lows

The top chart is a daily chart of the SPY and the bottom chart is a new highs & new lows indicator.

Negative Divergences:
Yellow lines just before a market selloff
Green lines just before a market selloff
Red lines - will this also be just before another selloff ?

If another selloff does materialize from the longest of the three divergences, it may also be the deepest selloff and possibly break the October 2014 bottom.  Potentially this will create a megaphone pattern which in itself is very bearish.

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JNK vs S&P500

2007-2008 and 2010-2011

 

 

 

 

2010-2011 and 2013-2014

This is a chart of JNK.  It tops out before the DJIA and the S&P500 (charts not included above).
JNK topped in 2007 and in 2010 just before the 2008 and 2011 corrections.  The question is will the 2013 and 2014 in the JNK be suggesting another correction again now?  Or was the October 2014 correction it?  This is another chart to be watched carefully for any further hints.

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Short Term Forecast

Review of the last Short Term Forecast Dates Made Nov 6th
- Forecast Trend Change Dates are (+/-)
1) Nov 14th-16th +/-
2) Nov 29th +/-

COMMENTS

On one of the forecast dates, Oct 17th +/-, the market started a rally from the Oct 15,16 bottom.  The next date to watch is Nov 29th especially since the intermediate term forecast is for a down bias after the period of mid to late November. 

Following cycles has been good to use as a guide or as a potential future road map, but, other tools must always be used for confirmation of any forecast trend change date.  

 

NEW SHORT TERM FORECAST DATES

- Forecast Trend Change Dates are (+/-)
1) Dec 6 +/-
2) Dec 11-14 +/-
3) Dec 16 +/-
4) Dec 25 +/-

Since cycles do not distinguish between trading days and calendar days, the cycle dates may come out on Holidays or weekends.  So the dates suggested that do fall on such days are to be used as a window.   So, as always, other tools must always be used for confirmation of any forecast cycle trends.  All forecast dates will still be noted with a "+/-" because the cycle dates are not always as perfect as we would like them to be.  Although they have been pretty accurate.   

Intermediate Term Forecast Trend Change Dates

Intermediate term cycles forecast at this time points up into mid to late November and then a down bias into December/January. 

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DJIA Seasonality Charts & Data

                       This chart is courtesy of EquityClock.com

There are two line charts.  A blue line and a magenta line.  As in the legend the blue line represents the composite of Mid-Term Election Years and the magenta line represents a composite of many years.  The Timeframe: 81 year range ending 12/31/2009.
As suggested by this chart we are in the seasonally favorable period.

Per EquityClock.com
The Markets
Stocks traded flat on Friday as the momentum following the significant gains recorded since mid-October shows signs of waning.   The S&P 500 Index recorded a gain of a mere 0.02%, however, the fourth straight week of gains was logged, adding another 0.39% to chart further all-time highs.   Gains during the week ahead my be difficult to achieve as November options expiration drags on broad equity benchmarks.   Over the past 60 years, the S&P 500 Index has averaged a loss of 0.03% during options expiration week.   Losses were realized in approximately half of the periods.   This year’s November option expiration occurs much later than usual on the 21st; similar instances of November 21st expiration dates have been particularly negative for stocks.   The S&P 500 Index has recorded a decline of 1.16% during this late expiration week with negative results recorded in 63% of periods.   The last instance was in 2008 when a November option week decline of 8.39% had a significant impact on the statistics for this downbeat timeframe.   The good news is that the losses are typically reversed in the week that follows.   The S&P 500 Index averaged a gain of 0.49% post expiration week with positive results realized in nearly two-thirds of the periods.   Post expiration week generally encompasses US Thanksgiving, providing further buoyancy to equity benchmarks during what is a holiday shortened period.

S&P 500 Index returns surrounding November Options Expiration
Year	Options Expiration Week Return	Post Expiration Week Return
2013	1.56%	0.37%
2012	-1.45%	3.62%
2011	-3.81%	-4.69%
2010	0.04%	-0.86%
2009	-0.19%	0.01%
2008	-8.39%	12.03%
2007	0.35%	-1.24%
2006	1.47%	-0.02%
2005	1.10%	1.60%
2004	-1.17%	1.05%
2003	-1.43%	2.21%
2002	1.69%	2.28%
2001	1.64%	1.03%
2000	0.13%	-1.90%
1999	1.86%	-0.38%
1998	3.36%	2.47%
1997	3.74%	-0.80%
1996	0.93%	1.51%
1995	1.24%	-0.02%
1994	-0.19%	-1.99%
1993	-0.60%	0.10%
1992	1.00%	0.82%
1991	-2.61%	-1.69%
1990	1.08%	-0.64%
1989	0.74%	0.69%
1988	-0.54%	0.29%
1987	-1.48%	-0.69%
1986	0.56%	1.37%
1985	2.27%	1.72%
1984	-2.09%	1.72%
1983	-0.72%	1.27%
1982	-1.80%	-1.56%
1981	0.03%	2.78%
1980	1.43%	1.01%
1979	2.25%	0.85%
1978	-0.37%	1.45%
1977	-0.68%	1.43%
1976	2.70%	1.21%
1975	-1.58%	1.91%
1974	-4.00%	-4.19%
1973	-1.35%	-4.27%
1972	1.55%	1.54%
1971	-0.55%	0.36%
1970	0.42%	2.64%
1969	-2.83%	-0.54%
1968	1.76%	0.49%
1967	0.66%	1.16%
1966	-0.83%	-0.50%
1965	-0.33%	-0.23%
1964	1.26%	-1.30%
1963	-1.38%	-3.79%
1962	2.35%	2.29%
1961	0.77%	0.31%
1960	-0.09%	0.56%
1959	0.21%	1.28%
1958	-0.73%	-0.42%
1957	0.45%	1.24%
1956	-1.29%	-1.31%
1955	0.66%	0.31%
1954	-0.27%	3.29%
Average:	-0.03%	0.49%
Frequency of Gains:	32	38

Now let's compare 2014, a Mid-Term Election year ending in a "4", to other such years in this chart above.

Year    Options Expiration Week Return     Post Expiration Week Return
1954                     -0.27%                                    3.29%
1974                     -4.00%                                   -4.19%
1994                     -0.19%                                   -1.99%
2014                         ?                                             ?
Average:                       -1.49%                                   -0.96%
Frequency of Gains:    0 out of 3                           1 out of 3

When looking at similar years as 2014, the statistics look different than in the large data chart above including all years from 1954 to 2013.

Now let's look at all years ending in a "4" (the decennial pattern)    

Year    Options Expiration Week Return     Post Expiration Week Return
1954                     -0.27%                                    3.29%
1964                      1.26%                                   -1.30%
1974                     -4.00%                                   -4.19%
1984                     -2.09%                                    1.72%
1994                     -0.19%                                   -1.99%
2004                     -1.17%                                    1.05%2014                                                                     
Average:                       -1.08%                                   -0.24%
Frequency of Gains:    1 out of 6                           3 out of 6

Lets compare the analysis summaries from above

               Options Expiration Week Return     Post Expiration Week Return
1st Data Chart:
Average                -0.03%                                        0.49
# of Gains          32 out of 60=53%                   38 out of 60=63%
2nd Data Chart:
Average                -1.49%                                       -0.96%
# of Gains            0 out of 3=0%                          1 out of 3=33%
3rd Data Chart:
Average                -1.08%                                       -0.24%
# of Gains           1 out of 6=17%                         3 out of 6=50%

Observation: When you filter the years 1954 to 2013 you make a better comparison to 2014 and the results change.
The top blue and magenta line chart took into consideration the Mid-Term Election Years.  The 60 years of data should have made a similar comparison.

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Past performance is not indicative of future results