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It's All About Timing

thetechnicaltake's picture


The markets are all about timing. In this case, 55 weeks.

Figure 1 is a weekly chart of the S&P Depository Receipts (symbol: SPY). The indicator in the lower panel is a composite of two of our Rydex indicators that assess investor sentiment on an intermediate term basis. When the indicator is green, investors are overwhelmingly bearish on the equity markets, and as history shows, this is the time to be bullish. When the indicator is red, investors are extremely bullish, and the market momentum will flatten out. The time frame of the chart goes back to the March, 2009 bottom.

Figure 1. SPY/ weekly

Now focus on the green vertical lines that stretch across the price chart and indicator. Each green line is placed on the first week of the bull signal that led to a market bottom. Now focus on the red vertical lines. Each red line is exactly 55 weeks (a Fibonacci number) after the bull signal. This past week was the 55th week from the previous bull signal. The prior two cyclical bull moves since 2009 also lasted about 55 weeks from bottom to top. It should be noted that the length of bull moves in the prior bullish market cycle from 2003 to 2008 averaged approximately 34 weeks (another Fibonacci number) from bottom to top.

This is more evidence that the current bull run is nearing completion. As stated for a couple of months now, the price action is consistent with a market top.


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Mon, 10/15/2012 - 14:32 | 2891496 Abednego
Abednego's picture

I am guessing that if one could so easily predict exact dates and times one would not be peddling their charts on ZH but instead be rolling on a white sand beach in a speedo stitched from $100 dollar bills... everytime I really think we are past the QE inflated market bull run some jackass hollers days and weeks and predicts the end of the world, at which point I sigh and think, now we know when it isn't...

Mon, 10/15/2012 - 12:52 | 2890875 Atlantis Consigliore
Atlantis Consigliore's picture

Printing stocks, with QE 4, after printing mortgages, 

PRINT PRINT PRINT, fundamentals and technicals, worthless;  as public sold $ 300 B stocks out,  run and hide.

rename us, Japan, same dog fleas.......

Mon, 10/15/2012 - 12:50 | 2890871 NewWorldOrange
NewWorldOrange's picture

"Technicals" have ZERO predictive value even when the markets function in a semi-logical manner driven by the real economy. Totally worthless "article."

Mon, 10/15/2012 - 11:37 | 2890582 vast-dom
vast-dom's picture

if only charts could mean something in these days of central planning. look at Japan levitating for decades and thus subverting all attempts to chart rhyme and reason from their fundamentals, more at lack thereof. 

Mon, 10/15/2012 - 12:48 | 2890853 LawsofPhysics
LawsofPhysics's picture

many countries have, but there have always been other countries that are doing well.  This is the first time that the majority of the world is essentially "Japan".  Good luck with that.

Just like Japan and WWII, watch the contracts to deliver real commodities.  When these contracts start defaulting, shit gets real, not before.

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