I show a cycle top in the S&P the week of December 6 based on the early July low as a starting point (blue lines). My guess is that the December cycle top will not exceed the November 5 price peak, but I could be wrong.
If we halve the time from the November 5 peak to the projected peak the week of December 6 (red lines), I get a projected cycle low on or about Monday, November 22.
Accordingly, I will be looking to close out my short position starting this Friday, November 19 if we reach one of the price support levels I have identified below.
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Parker - I am looking at similar first lower low around anytime now to friday. But then I have second low on dates near Dec 5. This is preety opposite to your above estimate. In-between I have bouce of thanksgiving week.
ReplyDeleteParker, Was your nyad:cpc chart not an option to use in this scenario to find a potential bottom?
ReplyDeleteJD
ReplyDeleteGood question. The time cycles simply tell you when to watch for clues of a reversal. A price support level which holds is just one clue.
I'm monitoring the other clues, including the Advance Decline Put Call Ratio (ADPCR) chart, as well as the volume oscillator and the Arms Ratio.
Looking for a buy signal on the Arms Ratio (5 day MA > 1.6).
Looking for bullish divergence on the oscillators (rising bottoms on the oscillators vs. falling bottoms on price).
I expect it will all come together on Friday or early next week.
Parker, by spreadsheet I'm getting 49 trading days from July 2 to Sept 21. That would target appx Dec 14 with one holiday day (Thanksgiving).
ReplyDeleteLuv
ReplyDeleteYou're off a little bit. It's over 11 weeks. And the chart is correct.
Your right, I used the line number on one day and the day number on the other. The 8th Dec would be the theoretical day, week of the 6th looks good.
ReplyDeleteI'm either going to have to finish the programming and let the sheet give me the answer or at least make the day number column = the line number.
That leaves not a lot of time for a drop into the nulled echo low but the market can move pretty fast at times.
I had mentioned some time back about Jim Curry cyclewave and his free articles. He was looking for his 90 day cycle (everyone has differently) correction with 4.4% decline and min 7 trading days. Looks like that happened. After that he is looking for new uptrend towards Jaunary. Same time he has avg figures of +6% and avg 3 weeks correction possible too.
ReplyDeleteParker,
ReplyDeleteMy understanding of your post is that you are projecting a peak about December 6th...when Laundry is projecting a low...give or take a couple of days.
My assumption here is that your MFI approach will continue to give a divergent perspective "at times" from Laundry.
I should have used Laundry's specific terminology, as in "nulled echo low" in mid December ...per his PDF chart.
ReplyDeleteDow up 183 and SPX up 20.50. SPX has now broken the drown trend resistance line in all time frames, ....
ReplyDeleteI guess the old saying "What's good for GM is good for American" must still have some traction.
Look at them run the shorts! (meaning me)
Bill
I'm BNG (Brand New Guy) to "T Theory" so can not make any eye opening observations so far. But! The Market Oracle Sept 1, 2009 had an article comparing our markets to Japan. Here's the link: http://www.marketoracle.co.uk/Article13141.html
ReplyDeleteThe top of this Bear Market rebound is predicted to be Dec. 10, 2010
It is not a sophisicated analysis just a comparison of the S&P in DXY to the Japan Market in the 1990s.
I have always thought it was worth keeping in mind.
Breezy
Holding on to my SPY shorts as of 1:10 PM Thursday. Still up.
ReplyDeletePOMO infusions have been intense and frequent, so I'm not in denial to the possibility of a move beyond the double swing high here.
I still don't see it happening though.
parker,
ReplyDeletethe early july low does make a good start to the current T; but isn't this done in hindsight? was the late august low ever considered? afterall it is below its moving averages. so shouldn't that august low make a confirming low to start the T?
joe
p.s. i love the concepts you and terry laundry have developed. thanks.
Hello parker,
ReplyDeleteDoes a day like today change your expectations for either low next week or the null echo low in December? Huge rally today, seems like Tuesday was a major bottom. Standard 5% retracement and bull market still in effect?
Did you cover any shorts at 1175?
Thank you. I am new to this blog and just reading about T Theory for first time.
Yes Parker it would be helpful to hear how your Dec 6th high relates to Terry's Dec Null echo low. The forecasts seem to conflict....
ReplyDeleteThe null echo low should be the time measurement from B-C added to the peak at D. I use closing data and point B was July 2nd and point C was August 26th. Add this to the topping date of November 5th and your null echo low date should be December 31st. Now since there were numerous places to pick your low dates ranging from July 1st which was the actual intraday low to a triple low that spanned Aug 25-Aug 31 Then you can have a timetable of Dec 30 through Jan 6th as a topping zone. Breaking it down even further I have the suspicion that today's rally will not follow through and Friday will be negative. In addition, shorter term cycles don't bottom until next week which very well could make the Dec 2nd-8th a interim top but not likely higher. Longer term cycles still point to the possibility of another more important top before we tumble.
ReplyDeleteJeff,
ReplyDeleteGood assessment of the situation IMO.
Greetings everyone. Sorry I was out of pocket yesterday - unavoidable. I'll be catching up today.
ReplyDeleteLakewood - the nulled echo low is based on a 3+ year cycle. The margin for error on timing is much greater than a 2-3 month Money Flow T.
Thanks for the info, Breezy.
Joe - using the late August low as a starting point produced a target of interim resistance in mid-October. As the Money Flow T tutorials show, you use the first low in a multiple low bottom pattern to project the end of the trend, and alternative starting points can project good interim resistance/support dates.
Alex - my position is still open.
Parker - your money flow T may come right. here is some info -
ReplyDeleteOne astrologer I follow (not wallstreets favourate astolgers) wrote "We shall expect a change in trend on Nov. 10, 18,26, Dec 6" ..
Till now
After Nov 10 started down
After Nov 18 started up
If there is going to be second leg down which I trust Cobra and not astrologer! Then
After Nov 26 should start down 2nd leg
After Dec 6 should start new uptrend.
Remember urnaus is turning direct Dec 5. It had turned retro July 5 which was major low too.
Also normally buyable lows are come last 2 days of month or first 6 days of month. means normally lows are in this period.
Also i am exprimenting crude small Ts. If you do T with centerpost at 17th low with start at 9th high you get 26th on right side which is in above info too. These Ts may not be accurate or mean nothing but normally some kind of top happens on these Ts (not necessary important tops).
I know Bill say cycles work till they work but at least with current status cycle low is expected end of month start of next month from which it is supposed to go to uptrend going higher highs. now its possible cycles stop working this time.
right now my theory is pullback at 20week sma or 200dsma .. both are almost in same region for low that may develope on dec 5-6. Of course totally opposite to your money flow T so one of it should be totally wrong.
Parker, Are you still holding shorts? Or did you go long today? Thank you.
ReplyDeleteParker,
ReplyDeleteA short term cycle cannot have a higher high than a long term cycle...unless the cycles are incongruent.
Therefore, IMO your MFI T Theory has limited conguency with Laundry's Magic T Theory.
I have no problem with the disconnect.
Parker,
ReplyDeleteI ran across Terry Laundry 1 or 2 years ago and have been studying his weekly updates closely for the last few months. I spent several hours this morning trying to backtest your Money Flow Ts.
I had very mixed results but MFT looks interesting. I had almost given up on EW a year or so ago but discovered that RSI-based EW worked well if the RSI period was adjusted to a certain percentage of each wave length. I based that on statistical sampling guidelines and generally accepted wave behavior, and I call it S2EW (my name is Stu). It's still not perfect by any means but less prone to changing counts and with fewer alternate counts all within original Elliott rules. When I changed the MF period dynamically (e.g. from 14 to 10 or 7 depending), some of the MFTs were more accurate but others I could not get to work regardless. The formula is probably different for MFTs. That's just some food for thought. I'll play with it more later and maybe even see how money flow works in EW since it's a variation of RSI with volume consideration.
Anyway, I have a few specific questions about the currently proposed SPX MFT posted on Terry's site scheduled to top in early Dec.
1. Why use the July low to start the current MFT since there is May/Jul MF divergence on those 2 lows? I think your video says to split the divergent lows. That would change the MFT end date to late December.
2. What is your criteria for considering 2 or 3 bottoms a multi-bottom versus completely independent bottoms? Your video says to use the first bottom in a multi-bottom situation to start MFTs and your video example had one low about .7% lower than another. Although SPX did spike 2.5% below its May low to 1011 on Jul 1, Dow was only 1.4% below its May low. And, the leading markets (financials and banks) made lower lows in August. Russell 200 did too and JNK, which many consider truly leading, bottomed in May. To me, it seems reasonable to argue a double or triple bottom in SPX/Dow which would place the start of the MFT in May and the end in mid-to-late January. Is there a cutoff for a double/triple bottom at a certain percentage difference or days below or ??? If I split all 3 bottoms, I get a Nov 29 MFT end date.
3. Is an MFT invalidated if Money Flow moves back beyond the extreme MF level that occurred at or around the start of the MFT? Out of your 5 or 6 video examples, there was one MFT in which money flow fell back below the level it started at before the T ended but it happened a mere few days from the end which may have been an early confirmation divergence of sorts. In the current MFT, August money flow fell below Jun/Jul money flow but not May money flow. That might be yet another argument for using the May low as the start of the current MFT OR it might be an argument for invalidating the whole MFT although I cannot say I studied that.
BTW, if I use the last 1039.70 SPX bottom to start the MFT possibly because the lower money flow low at 1039.70 invalidates an earlier start, then I end up with a Nov 4 top. Hmmm.
FYI...I did a 4-year analysis using discretionary spending as a lead indicator for SPX and it projects a 10-15% drop over 1-2 months starting in November. I am doubtful things hold up to Dec 9th unless that's a backtest/wave2. See http://2.bp.blogspot.com/_W3h48eCT8jM/TOArzQRLiSI/AAAAAAAAAHQ/kl2crVKws8c/s1600/SPX3yrConsumer20101111.png
Thanks in advance for your time and good luck.
Nov 22 seems to be now top and not bottom. Its still possible your other projections of dec 6 top come true but I also have many quesitons similar to S2. In one para S2 mentions Nov 29 as top date by spiltting bottoms etc but some trusted cycle man has same nov 29 as 90 day cycle bottom. There should not be fully oppositite prediciton for same date like top and bottom. So I feel its little early to go with these MFI Ts. IN fact I don't find Terry's regular Ts also confusing as his berish Ts can turn into bullist Ts etc. I am not saying T theory is wrong.
ReplyDeleteParker's vix/vxv indicator for complacency has spiked down to .84.....my study of that indicator has shown that .85 or lower is extreme complacency. Any comments?
ReplyDeleteAlan
ReplyDeleteI've noticed the same. That's one of many indicators showing that we are setting up for sizable correction soon.
Stu
ReplyDeleteThanks for your input and questions.
1. I use the July low on the S&P Money Flow T because it clearly demarcates the end of the down move from April 26, and the start of the up move. No one would argue that the downtrend was over in mid-May.
Further, the only time you split divergence to start a Money Flow T is if there is divergence within the topping or bottoming pattern of a single discreet top or bottom. For example, see the inverted TLT Money Flow T I posted in today's blog entry.
The divergence you see in the MFI in May is actually the center post of an inverted Money Flow T that started at the April top and projected a ~July 7 end to the down trend.
2. I only had 5 minutes on the video to cover where to start the T. Obviously, it's more complicated than 5 minutes will allow.
Generally, a Money Flow T will start from a single top or bottom, a multiple top or bottom, or as a breakout from a consolidation pattern. When starting your T out of a top(s) or bottom(s), your guiding principal should be: when was the last move over? When starting your T from a consolidation pattern, your guiding principal should be: where is the breakout?
I have developed no hard and fast rules as to what constitutes a single bottom vs. a multiple bottom in percentage terms. Or a date range restriction on how long a multiple bottom pattern can take to complete. Things like that are an ongoing project.
As for discrepancies between the S&P and the Russell, or between the S&P and various sectors within the S&P, it can be fruitful to study those differences. But don't take your eyes off the prize. The S&P 500 accounts for the majority of market capitalization among publicly traded US companies. It's the standard.
3. Often, you will find Money Flow Ts that conclude in a MFI peak that is more extreme than the MFI peak that occurred in the middle of the move. That doesn't invalidate your Money Flow T.
A Money Flow T is defined by divergence between price and MFI, but that divergence need not last all the way through the end of the T, and in fact need only exist for a few trading days.
Yash,
ReplyDeleteYour trend change dates are separated by 8 days in November then 10 days to Dec 6. Are you saying there is a short 8-day cycle? But then how would you explain the Dec 6 unique date?
Would you please explain your methodology further? Thanks!