Throwing The Baby Out With The Bath Water

With the Dow Jones down another 1190 points on Thursday and the S&P down another 137 points, it is undeniable that stocks are declining into their yearly cycle lows.

February is month 14 for the yearly equity cycle, placing stocks late in their timing band for a yearly cycle low. Stocks have already broke below the monthly trend line and is breaking below the 10 month MA. Stocks are forming a huge bearish monthly reversal which will ease the parameters for forming a monthly swing high. A monthly swing high is required for stocks to complete their yearly cycle decline. Since stocks formed a higher monthly high in February, the earliest a monthly swing high can form will be in March.

And as stocks are dropping down into their yearly cycle lows, they are taking other sectors right along with them.

The Miners are also forming a bearish monthly reversal. This is month 9 for the yearly Miner cycle, placing them in their timing band for a yearly cycle low. Like stocks, the Miners formed a higher high in February. Therefore the earliest a monthly swing high can form in March. Then the Miners should go on to close below the 10 month MA in order to complete its yearly cycle decline.

This is month 13 for the yearly oil cycle, placing it in its timing band for a yearly cycle low. Oil was rejected by the converging declining 10 month MA and the 50 month MA and is breaking lower. And with stocks dragging everything down, I do not expect to see oil bottom until stocks print their yearly cycle low.

2 thoughts on “Throwing The Baby Out With The Bath Water

  1. Thanks for your work. Once stocks hit their yearly low, in your opinion what is the minimum amount of months it has to go up before it rolls over again? Thanks again

  2. The first intermediate cycle coming out of a yearly cycle low should be right translated, otherwise a left translated weekly cycle would likely extend the yearly cycle decline. Assuming a normal duration of 18 – 24 weeks, then the first intermediate cycle should peak after week 10, but probably later than that. I hope that helps.

    LM

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