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.

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:

Cycle Count

Following up on a cycle count, like from this post ->http://www.toddstrade.com/2011/04/symmetry-force-velocity.html

The count may be slightly different from the previous post.  I adjust things slightly but feel it's pretty similar.  The prior Regular/Inverted cycles were within 7-weeks of perfect symmetry.  The current Inverted cycle is within 19-weeks of the previous Regular Cycle count symmetry.  Just a curious observation.

Another fascinating aspect of the current trend; Price magnetized to the Andrews Median Line mid-point.

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

geometry of a reversal

This is one of the most prevalent reversal cycle structures in the market (at least that's how I feel).

and here's a look with today's @ES_F

and with volume

and 1 more chart with the main breakdown pivots

symmetry, force, velocity

  Just an interesting observation of price symmetry.
  Looking at a SPY weekly chart going all the way back to the start of cheap credit and Über leverage.
- 266 weekly bars on the way Up, and half as many on the way Down, 133.
- Another 261 (roughly twice as many) weekly bars on the way back up to a double top (key technical "topping signal").  At this point we have a nearly perfect symmetrical cycle with a 2:1 up/down ratio; up, down, up to re-test, fail.
- The Double-top failure was 73 bars down, or roughly one-third the amount of time it took to test the highs.  
- Since then we have traveled 103 weeks up, or One & one-third the time to retrace higher. 
  

- So, in this case we had two symmetrical waves moving happily along until acted upon by a force (i.e. Double Top supply). Put another way, an object in motion tends to stay in motion until an outside force is applied.  So, we get an outside force (Double Top supply) at which time there is a reaction whose velocity is determined by its Force.  If the Force (F) is the 261 up bars and the (a)cceleration = 73 bars down and F=m*a or 261=m*73 then m=3.5, so the velocity changed at a rate of 3.5 times.  What does it all mean?  Who cares.  But it is what Andrews (from Babson) was analyzing through his use of Pitchforks.  The pitchfork (or Andrews Median Line) highlights the vector which price will move within once the force and acceleration (action/reaction) are measured.

Looking closer we can add one more pitchfork off of the March '09 lows:
('UML' = Upper Median Line, and 'Mid-Line' are from the longer-term chart above).  What I'm trying to point out is the confluence of the 3 separate pitchforks where price currently sits.

Anyway, adding some Fib. retracements in for good measure; the 78.6% has capped previous moves for these cycles.

While measuring the largest wave in the most recent move and projecting a Fib. extension off of it gives us the following:

As an aside, I'm not totally well versed in price projections, aside from what feels natural to me.  But measuring the 1, 3, & 5 waves off of the March '09 lows and projecting them off the beginning of our move higher starting back in Oct. '10, a confluence of resistance lies around the$140 & $143 levels.

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).

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).

energizer bunny rally

In yesterday's post I marked up a chart of the SPY using the Stevenson PTT method. Here's a continuation of that chart into today's session.As you can see the target for the Regular Cycle after the open came right on time and fell within a penny of the PTT. It also happened to fall within previous volume clusters and Tuesday's Point of Control(more on this later). The ensuing rally out of this area then formed our Inverted Cycle and, though it rapidly approached the PTT, fell short of the mark before entering it's Regular Cycle. Two things can be garnered from the two middle cycles today.
- The first IC of the day fell short of it's target, but approached it in a rapid pace.
- The RC that followed fell well short of it's target, and instead morphed into smaller cycles on the smaller time frame, turning price higher, like so:
Back to the volume cluster levels. Here's a look at the most recent day's volume distribution, where I marked the strongest levels. Yesterday's distribution level $115.11-115.16 is our VPC. Transferring those levels onto a price chart, here are the 3 bands I was looking at going into today:
The lower range acted as nice support, while the VPC from yesterday was a level of potential resistance (though we didn't quite make it that far this morning, price did hesitate within it later in the afternoon). The middle set of hash marks ($114.92-114.8) saw price acceptance rotate within it's range through most of the day.
The price congestion at the Open is highlighted in a rectangle. At this point a surge of volume allowed our open to act as support.

It seems that the only hope for a bearish outcome to this rally (even if that merely means a reasonable pullback) may be a 2B top. In which case we should look for a close under today's low within these next few sessions.

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.