Thursday, December 17, 2009

SPX.X Cycles

The trading cycles seem to be stabilizing. What may be significant is that the dominant period has shortened from 55/110 days to 42/84 days. The 21 day period is a little sloppier.

Individual stocks seem to be doing their own thing as investors rearrange their portfolios to position themselves for 2010 and complete whatever tax loss selling remains. My current expectation is for continuing choppy weakness in the market until the 1st or 2nd trading days in 2010 which should be a tradable low. All this assumes the MCO behaves appropriately for the next couple of weeks.

The SPX daily chart with time cycles.
Expect market weakness until after New Years day.
Click to enlarge.

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