Cycle Update

Had to re-draw the SPY cycle count being that we made another high.  It's been a crazy run.  Technically the cycle isn't considered over until price closes beyond the "Cyclic Trend Line" (CTL, in fuchsia).  In other words, we have a long way to go

Cycle symmetry

The current SPY Inverted cycle is official symmetrical to it's previous Regular Cycle.  Stevenson guidelines dictate that the cycle itself is not complete until the Cyclic Trend Line (CTL) is violated.  The fuchsia trend line indicates the CTL on the chart below.

GC

Updated chart from the ones below, to show the fast line/slow line cross providing a warning if long

Actually a bit surprised that Gold continues to squirm higher.
The daily is putting in fairly symmetrical cycles and is at a point where one side will show their hand and we'll see if bulls or bears are stronger here.  The bulls have a double-bottom on their side, while the bears have everything else (moving averages, trend lines, and overall trend).

The 4-hour came so close to it's initial target.  It still has an opportunity to achieve it, but it can be sketchy holding a position on a fairly late entry so close to resistance (a for sure exit would be the fast line/slow line cross on this time frame's 3/10macd (lower subset indicator).

a better look at the cycles

Dow Symmetry

Interesting symmetry on the Dow monthly chart.
The 1994-2002 'Regular Cycle' of 96-bars was only 2-bars (months) shy of perfect symmentry when compared to the 2000-2007 'Inverted Cycle'.  The current (2007 to now) Inverted Cycle is 74-months and counting, in comparison to the 2002-2009 Regular Cycle of 78 bars we're getting pretty close to a symmetrical comparison.

As an aside, the fuchsia parallel in the chart above is the 'Cyclic Trend Line' (CTL), a designation which, when crossed, is supposed to mark the end of one cycle and the beginning of the next.  Here (bleow) is where previous CTL's would have been placed.  The breakouts from a down trend happening much cleaner and faster than the choppy breaks occuring in a down trend (replete with throwbacks).

SPY cycles

Update on the near-term SPY cycle count.  The most recent "Inverted Cycle" (with a "7" count) makes it seem as though more downside. The 12/04 pivot being essential for putting in an extended "Regular Cycle" from here.  The other possibility (being that tomorrow is day 7 in this current Regular Cycle) is that we have a symmetrical Regular cycle before turning back up for the next inverted cycle.

cycles

Food for thought:
 Very symmetrical cycle count leading up to this breakout.  It is easily possible that this current inverted cycle could last another 18-days and it would be symmetrical with the preceding 22-day regular cycle.

There is a caveat:
The second and third cycles in the image above (marked 51 and 47 respectively) have a price behavior pattern that is similar to a 'throwback' to a trend line.  Being that the Cyclic Trend Line (CTL) is so steep, price naturally "breaks down" from it out of the sheer speed of the move.  But because the prevailing move was so strong this is seen as a buyable pullback (channel on a faster time frame perhaps) and so it makes a new high while throwing back to the CTL which, in turn, warrants a re-drawing of the CTL and giving us a new boundary for the beginning of our next cycle.

These next two charts illustrate what I'm trying to convey.

So, that 'caveat' being that there is potential for the same thing to be taking place currently, as is shown in the chart below:

Gold lower

Not looking good for Gold.  I had hope for it a few weeks ago, but sell stops were unwound.
My premise a while ago was that it could be forming a cup w/ handle pattern, but since that posting, the handle (channel) broke down further.

The daily (above, right) looks a bit oversold at this point, so I can see a pullback higher to try and regain the weekly (above, left) lower channel.  If buyers are attracted then I can see a buy divergence on the weekly playing out, but the ball is obviously in the bear court.

Looking at the monthly (below, left) I can imagine that if 1529 gives then I think it can get messy.

Just for kicks, below is the weekly cycle count, since it has been consolidating for 77-weeks (I believe).  Previously, it spent 100-weeks in a bullish frenzy after a consolidative breakout.  So, it seems about right that it is consolidating as much as it has been in order to give symmetry to the previous bullish momentum.
The red line represents the price and time target based on the previous Inverted Cycle.  The fuchsia line is the cyclic trend line (CTL in the Stevenson PTT concept) which is the trendline needed to be broken in order to consider the current Regular Cycle ended and the next inverted cycle to begin.

cycling

Updated:
   If you're not familiar with Stevenson Price & Time Targets you can go to this link.
In the chart below; fuschia line being the CTL and Red lines being the time targets

symmetrical cycles building on the SPY ....holding that 50% retrace looks bullish

 update
the cycle gets tighter

SPY going forward

The SPY weekly is setting up what I call the 2c-2d setup (basically a reverse divergence in a bullish trend, as indicated by the 20- & 50-MA's).  So, when identifying a 2c-2d setup, I look to the faster time frame (in this case the daily) for an entry which usually comes in the form of the 3d criteria, and low and behold, that's what we have:

Some notes:
   -The weekly came into a support zone in the form of the 38.2% retracement that also happened to be the 50-week moving average.
  - When noticing the 3d criteria I look to the left, identify a 3a, and that gives me my resistance zone; or where price may likely encounter, well, resistance.  This is indicated on the daily chart, and happens to line up with the 50% Fib. retracement as drawn between recent lows and the May highs.
 
  After identifying this setup I look for a price pattern that looks like 3-pushes to a low or an inverse Head & Shoulders.  From there I then draw a Fib. projection off of the seed wave to attain price targets.  The seed wave will likely be the low of the inverse H&S's head to the high preceding the most recent higher low, make sense?  This seed wave is only a potentiality because we don't know yet whether the lows are in, but that is what gives us our Risk:Reward profile.
  So, here is a closer look at the Daily chart

The rounding aspect of price can be highlighted by tracing out these symmetrical cycles a-la John R. Stevenson

corrective cycle

While the Stevenson PTT concept is a bit difficult to read in trending markets it does tend to be clearer in range-bound or corrective markets.  Take the SPY for instance;  going back over the past month price has adhered to roughly a 10-day cycle while it tries to determine a direction for a more sustained move.

I have never really been satisfied with the reliability of the Stevenson target projections (red line), but the CTL (purple line) usually holds true to definition (CTL = Cyclic Trend Line, where a close outside this line indicates the beginning of your next cycle phase).

Here was another classic corrective cycle last summer with very symmetrical cycle lengths

Cycle update

Thought I would update the bar count on the S&P500 cycles.  If you're not familiar with the Stevenson PTT you can refer to the link embedded here.

Spanning the years 1995 through 2007 the S&P enjoyed quite a symmetrical cycle phase.  We had:
- A 64-month rally from 1995-1999 followed by a 31-month selling phase for a total of a 95-month long cycle.
- The 2002-2007 rally lasted for 61-months, culminating in a 92-month long Inverted Cycle.
- With extreme volatility came the completion of our next Regular Cycle which lasted only 78-months due to the rapid selling which took place over the course of 18-months between Nov. 2007 & March '09.

 The end of one cycle and the beginning of another is determined (by Stevenson) by the close outside of its Cyclic Trend Line or CTL.  This actually happened back in July of 2011.  The chart below shows a closer image and adds the CTL (magenta trend line), highlighting the price close beyond that point:

 What is interesting is that IF the long time frame Inverted Cycle has concluded it would have done so in 44-months, which is pretty close to half the length of the previous three cycles (which would make sense given the extreme volatility).  We can't say for sure that the cycle is complete (as price did make a higher low) and price is just throwing back to the CTL, or if the cycle is still intact.  We can only say for sure that the cycle is still intact IF price takes out the May 2011 highs, in which case we would re-draw our CTL and consider the Inverted Cycle to remain intact.

Since the 2009 lows price has formed some pretty symmetrical intermediate cycles that have averaged 16 months in length, of which we are in the 9th month of an inverted cycle whose price and time target (red dash line) is just beyond the May 2011 high, projected to be within 7-months.  Again, prices beyond the May 2011 high means that the longer-term inverted cycle is still intact.

2c

AAPL ....adding this for the sake of having it on here.  2c long entry.  Price pulling back  in a bullish trend.  Price forms somewhat of an inverted Head & Shoulders,  or three-pushes to a low sequence.

 Also, something which stood out for me was the symmetrical cycles which formed, wherein I harken back to the 'ol Stevenson PTT concept.  Red lines are targets based off of the previous cycle and the purple line was the CTL which triggers a long entry.  I actually traded this for a tiny gain as I covered almost to the tick before it rocketed higher....very frustrating

USO pitchfork

Had some key Median Line setups these past few cycles in USO.
After two tests of the Mid-line, price returned to and broke down from the Lower Median Line.
The first congestion zone was right around the "Trigger" Line before breaking down further where it now sits at a potential support price (previous swing low).
Pitchforks seem to work really well (in terms of the setups involved) when you have some visible cycles present (non-"trend").
If no bounce from here, then $31-support is in play.

RIMM wolfe wave

Bullish wolfe wave in RIMM that has a couple of things going for it;
- Strong Volume
- a gaped-down hammer candle
- a higher low than the previous swing lowSeen in a clearer light, price is at the bottom of a small downward-sloping channel, where we can plainly see symmetrical cycles of similar length (Regular Cycle 9-bars, Inverted Cycle 7-bars, and most recently an Inverted Cycle which is, so far, 8-bars in length).
Further illustratedThe price target for the next Inverted Cycle (should price not take out the current low) would be the top of this current channel, around $54. While the Wolfe Wave target is up towards the gap fill area ($57ish).

Update

Recently updated blog post.

Also, the last four weeks in the ES (60-min time frame) including the Stevenson Cycles and bar count.

SPY cycle update

Some more updates on the Stevenson Cycles in the SPY, with a few different scenarios;
Here we have a broad, generalized look at the larger cycles at play:A little more complicated version I came up with, which illustrates how after a big full cycle completes (the IC trend up from Feb. through April and the "flash crash" scenario that played out to complete the IC/RC phase) one can expect a RC/IC consolidation phase that forms a range with cycles of lesser amplitude. It is also helpful in how it can highlight when price is "coiling" as it did in the most recent phase:Here's an alternative which shows a little less noise than the one above:And here is one showing where the complimentary cycle targets where (solid red lines). The targets weren't met until price started to stabilize after the large momentum thrust:

I haven't done a post regarding the Stevenson PTT in a long time, but that doesn't mean I don't pay attention to the cycles playing out.
Going back to the beginning of the year on SPY, we saw the Inverted cycle complete, while the Regular Cycle target was met early (sign of weakness).
Next we have the "flash crash" selloff that completed our Regular Cycle (RC) leading to our next Inverted Cycle (IC) which is now down. We have two Cycle targets that are still valid:- We could just start rallying like crazy to go back to April highs, thereby completing an IC that would be just as wide as our previous Regular Cycle that stretched from Feb. to June.
- The bottom could fall out, confirming a close of our Down IC and giving us an extended Regular Cycle down.Price still seems to be recovering from the flash crash supply dump, and though be it wide, price is range-bound. Recently, we've seen some volatile supply/demand imbalance, which shows itself in wide, steep, and rounded cycles close together, like so:The previous Regular and Inverted Cycle targets were met on time (as they often do when you see such symmetry), while the most recent cycle, should complete (and start the next Inverted Cycle) with a close above Thursday's high.Whatever is going to happen it should be a big, strong move as these wide, steep, and rounded cycles close together often precede such moves.We saw this on a smaller scale back in April:I also happen to have a screen shot of an intra-day chart that set up this past week in MON:This behavior isn't subtle either. The price moves preceding it (in this case, a trend down with relatively average range bars) appear as orderly and typical of the observable environment. Then you get this order flow that is out of the ordinary compared to what came before it, obviously sucking in some positions that needed to cover (bringing fuel to the fire).

back forth testing

These past two days in the SPY gave nice, clear cycles as explained in the Stevenson Price & Time concept. Starting with the nice arching Regular Cycle from yesterday, this morning's Inverted Cycle quickly achieved it's upside PTT, while the next Regular Cycle came awfully close to tagging it's price and time target (this sort of cycle analysis isn't meant as a stand alone strategy, so if you're short on the last half of this RC a better profit target may be the day's Open). Later in the day we got some smaller time frame cycles interspersed so the symmetry began to fade.
Interesting setup we have on the Daily SPY chart, with a confluence of resistance points.
- We have price sitting in the sweet spot of a Bearish Wolfe Wave where the time objective comes around tomorrow.
- A blatant momentum sell divergence
- 161.8% Fibonacci Retracement level
- 100% Fibonacci Extension level
All as volume has increased these last two days.

nr z-day

Friday being a trend day, we followed through to Monday with a narrow range "z-day" (consolidation/oscillating day). A pointer (as far as L. Raschke teaches anyway) for these z-days is to watch the last hour's low (in the case of a trend day up) for potential support (or the most significant swing low in that 3:00pm area). In today's case, we came close, but didn't quite test that last hour trend day low.If you're able to stand the noise and focus on objectives, a z-day may also entail fading strength/weakness by perhaps using Bollinger Bands as a guide. While today's early morning range was very choppy between the highs and the Open, the lows of the day were put in near Friday's last hour low in the form of a Phoenix setup.
Today was a day where we just oscillated around vwap, so it may have been a good strategy to just play the extremes away from vwap by looking for TICK divergences and cover when reverting to the mean.
The first divergence of the day was a reverse divergence (higher TICK highs corresponding with lower price highs). The "Phoenix setup mentioned above was done on a TICK buy divergence, while the later afternoon test of the highs registered a TICK sell divergence.
I was alerted (reading the starwealth blog) to the fact that we may find ourselves in a bearish Wolfe Wave pattern. If this is the case we need to see a strong volume push (at the very least) into this 5-point, around $115.
After looking at the chart above I wanted to add in the Stevenson PTT for old time sake, because the cycles really jump out at you. Currently we're in an Inverted Cycle and it's a toss-up as to which will be achieved first; the breach of the CTL beginning a Regular Cycle down, or the Price & Time Target at the $116 level (read more about how these targets and triggers are obtained by reading the link above for Stevenson PTT.