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  AstroCycle Analysis of 12/31/09  

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Executive Summary

Last week I expected the SPX to pull back to 1115 early in the week and then rally back to 1130 for the Full Moon but instead we peaked at 1130 early and dropped to 1115 to close the year. This week could go either way but I expect the SPX to hold the August trend line and rally back to test the highs by Friday. Plan B has the SPX failing to hold 1100 and taking us down to 1085 by Friday.

Cycle Summary
This Bear Market is expected to make new lows by Summer and Fall 2010 for the 2 and 4 year cycle lows and a probable test of the lows or new lows by mid 2011 for the PI 8.6 year cycle low should we fail to make deep enough lows in 2010.

Trend is bearish but getting oversold for Monday
Most indicators continue to trend in a bearish way since we reached the 1130 level, and the SPX went into a free fall towards the August trend line near 1110 when it broke the key 50% level near 1121 on Thursday. The low closing Tick lines and the 4 day cycle low near the open suggests a rebound early on Monday but the 5 hour cycle low near 11:30am and the 3 day cycle low near 1:00pm suggests we will probably test support a few times on Monday before we find a level that holds, probably near 1110, 1100 or even 1085. The Breadth Pattern Matches are mixed to bearish and my bias for Monday is bearish below the December 03 high near 1110 but I may skip voting.

4 day cycle Monday (low?) and Friday (high?) + 4 mth cycle Wednesday (high?)
Most indicators are trending in a bearish way since the 1130 high of Christmas and the Tick lines are no longer very oversold suggesting we will continue lower towards 1110, 1100 or even 1085 before a rebound starts this week for a probable 4 day cycle and Full Moon low. If we hold above 1100 and the August trend line now near 1110 this week, then the SPX will most likely test the 1130 highs again or even reach the next Fib target near 1140 before heading back down towards 1100. We will need to break the 1100 level this week to keep the bearish trend going and break the 1085 level if we are to see the 38% level of 1015 next.

Trend is bearish to mixed for week ending January 8th
The SPX failed to break the top of the October wedge and we will probably test the lower August trend line near 1110 next but the indicators are mostly in the middle of their range and we could just as easily reach the next Fib level of 1140 for a 4 month cycle high this week, or drop to the 1085 area once more before we get oversold enough for another rally. The only possible bearish count is that Wave 5 from the November low is evolving into a Fast-Struggle-Fast topping pattern that will exhaust into a fast move up before dropping below 1085 once it completes as seen in the charts of the 2008 Top in Oil and the possible top in the SPX in late 09 . The alternative bullish count is that we have completed Wave 1 from the November lows at 1113 and will now move towards 1200 in January to complete Wave 3, 4 and 5.

Outlook is mixed to bearish for January
The SPX has been making highs and lows in the first week of the month since the March 6th low and since the indicators are mixed to overbought, we may head higher one more time in early January before we actually break the rising wedge pattern and decline into February. The Nasdaq indicators are a lot more overbought than the Nyse and any decline should start with Tech stocks leading the way.

The next move down should take us into the Full Moon of February 28th
Most indicators turned up after stalling and could support a further move up, but the blue Tick line is not climbing much yet and we are still below the key resistance from the 2007 down trend and 50% level near 1121. The 30 month cycle which has marked many important double tops and bottoms in the last decade is suggesting a January and April double top like we saw 4 x 30 month cycles ago in 2000, but also 30 months ago in July and October 07, which was a mirror image of the July and October lows of 2002 exactly 2 x 30 months before. Both the 2000 and the 2007 pull back were close to 10% and that would take us close to the 38% level of 1014 which must hold if we are to head back to test the highs in April. We are at the same price levels as in late 2003, but with very different fundamentals and those who expect the same outcome in 2010 as we saw in 2004 should be in for a surprise. The fundamentals erased a 5 year Bull market in a single year, and it can erase this one year rally in very little time.

Breadth Summation Indexes (BSI)

Daily BSI is bearish since December 31-09
Weekly BSI is bullish since December 22-09
Monthly BSI is bearish since January 4-08




Next Day Forecasting Accuracy
Forecasting the close can be difficult at times, and you can use my recent performance below as a guide to the current accuracy of my analysis of short term trends, but I sometimes skip voting if too cautious or other reason and my vote for Monday is bearish below 1110

Firebird - Your Score: 66.7% [Ranking]
Last 22 sessions: corrects=8, incorrect=3, omissions over limit=1.
SessionOpinionS&P 500Score
12-31-2009bearish-1.0%
12-30-2009bearish+0.1%
12-29-2009omission-0.1%-
12-28-2009omission+0.1%-
12-24-2009omission+0.5%-
12-23-2009bearish+0.2%
12-22-2009bullish+0.4%
12-21-2009bullish+1.1%
12-18-2009bullish+0.6%
12-17-2009bearish-1.2%
12-16-2009omission+0.1%-
12-15-2009omission-0.6%-
12-14-2009bullish+0.7%
12-11-2009omission+0.4%-
12-10-2009omission+0.6%-
12-09-2009omission+0.4%-
12-08-2009bearish-1.0%
12-07-2009bullish-0.2%
12-04-2009omission+0.6%-
12-03-2009omission-0.8%-
12-02-2009omission+0.1%-
12-01-2009bullish+1.2%

Moon, Cycles and More


Another mixed Full Moon

Full Moons are statistical lows and the blue Tick line looks like it could turn up here and give us another mixed Full Moon with an early high and late low which is opposite of the early low and late high of the last Full Moon. Because the red StochRSI line is not in agreement with the blue Tick line yet, this Full Moon low or high is not a low risk trade and it is best to wait for further development as we head into the New Moon and Solar Eclipse of January 15th. Since the next New Moon is within a month of the December 21st Solstice, it can bring high volatility and we should be cautious of a sharp decline into the 3 days preceding the next New Moon as the Possible Top Formation on the right illustrates.


See a larger Moon chart here

Possible Top in SPX



courtesy of StockCharts.com

The next 4 month cycle of January 5th is likely to be a high

The 12 month cycle likely peaked in September 07, 08 and 09

The 2 year cycle likely peaked in October-November 07 and 09

The next 4 year cycle low is due near July-October 2010

The next 8.6 year PI cycle low is due near June 2011

The 10 year cycle of highs in 87, 97, 07 and lows of 82, 92, 02 is due in 2012

The 40 year cycle of highs in 29, 69, 09 and lows of 34, 74 is due in 2014

courtesy of StockCharts.com

The next 3,142 days or 8.6 year PI cycle low is due in June 2011

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Short and Medium Term Market Breadth


Short term breadth pattern matching

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The Tick lines are turning bearish from overbought but stalling

The Put/Call and white Trin lines are turning bearish but stalling

The Slope and StochRSI are turning bearish

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The Volatility is turning bearish after a failed break of the key 20 level

The relative NDX 100 is turning bearish from all time highs

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The New Highs and Lows with ratio are turning bearish

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The Up and Down Volume with ratio are turning bearish

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The 5 and 40 day Trin are turning bearish

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The McClellans are bullish but are turning near a cycle high

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courtesy of StockCharts.com


Stocks above their 50/200 day MA are turning bearish

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Stocks on a Point and Figure buy signal are bullish

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Equities


Trend is bearish but getting oversold for Monday

Most indicators continue to trend in a bearish way since we reached the 1130 level, and the SPX went into a free fall towards the August trend line near 1110 when it broke the key 50% level near 1121 on Thursday. The low closing Tick lines and the 4 day cycle low near the open suggests a rebound early on Monday but the 5 hour cycle low near 11:30am and the 3 day cycle low near 1:00pm suggests we will probably test support a few times on Monday before we find a level that holds, probably near 1110, 1100 or even 1085. The Breadth Pattern Matches are mixed to bearish and my bias for Monday is bearish below the December 03 high near 1110 but I may skip voting.
See the NDX 1 minute chart here and the Dow 1 minute chart here

Click for Printable Chart

courtesy of StockCharts.com



4 day cycle Monday (low?) and Friday (high?) + 4 mth cycle Wednesday (high?)

Most indicators are trending in a bearish way since the 1130 high of Christmas and the Tick lines are no longer very oversold suggesting we will continue lower towards 1110, 1100 or even 1085 before a rebound starts this week for a probable 4 day cycle and Full Moon low. If we hold above 1100 and the August trend line now near 1110 this week, then the SPX will most likely test the 1130 highs again or even reach the next Fib target near 1140 before heading back down towards 1100. We will need to break the 1100 level this week to keep the bearish trend going and break the 1085 level if we are to see the 38% level of 1015 next.

Click for Printable Chart

courtesy of StockCharts.com


Trend is bearish to mixed for week ending January 8th

The SPX failed to break the top of the October wedge and we will probably test the lower August trend line near 1110 next but the indicators are mostly in the middle of their range and we could just as easily reach the next Fib level of 1140 for a 4 month cycle high this week, or drop to the 1085 area once more before we get oversold enough for another rally. The only possible bearish count is that Wave 5 from the November low is evolving into a Fast-Struggle-Fast topping pattern that will exhaust into a fast move up before dropping below 1085 once it completes as seen in the charts of the 2008 Top in Oil and the possible top in the SPX in late 09 . The alternative bullish count is that we have completed Wave 1 from the November lows at 1113 and will now move towards 1200 in January to complete Wave 3, 4 and 5.
See the NDX 10 minute chart here and the Dow 10 minute chart here

Click for Printable Chart

courtesy of StockCharts.com


Outlook is mixed to bearish for January

The SPX has been making highs and lows in the first week of the month since the March 6th low and since the indicators are mixed to overbought, we may head higher one more time in early January before we actually break the rising wedge pattern and decline into February. The Nasdaq indicators are a lot more overbought than the Nyse and any decline should start with Tech stocks leading the way.
See the Nasdaq hourly chart here the Nasdaq 100 hourly chart here and the Dow hourly chart here

Click for Printable Chart

courtesy of StockCharts.com


The next move down should take us into the Full Moon of February 28th

Most indicators turned up after stalling and could support a further move up, but the blue Tick line is not climbing much yet and we are still below the key resistance from the 2007 down trend and 50% level near 1121. The 30 month cycle which has marked many important double tops and bottoms in the last decade is suggesting a January and April double top like we saw 4 x 30 month cycles ago in 2000, but also 30 months ago in July and October 07, which was a mirror image of the July and October lows of 2002 exactly 2 x 30 months before. Both the 2000 and the 2007 pull back were close to 10% and that would take us close to the 38% level of 1014 which must hold if we are to head back to test the highs in April. We are at the same price levels as in late 2003, but with very different fundamentals and those who expect the same outcome in 2010 as we saw in 2004 should be in for a surprise. The fundamentals erased a 5 year Bull market in a single year, and it can erase this one year rally in very little time.
See the Nasdaq daily chart here and the Dow daily chart here

Click for Printable Chart

courtesy of StockCharts.com



Commodities


The CRB/DBC may have peaked with a 285 Fibonacci match

The CRB probably finished this move up at the 285/25 Fibonacci match but may exceed it briefly in January before pulling back towards 260 or even 250 by the Full Moon of February 28th. 		Click here for Chart
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courtesy of StockCharts.com


The CRB should turn down near 290 for the 17-18 month cycle high

Commodities are close to the 2006 lows near 290 and should turn down into the first half of 2010 from the 17-18 month cycle high, but the pull back is likely to be shallow. 		Click here for Chart
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courtesy of StockCharts.com


courtesy of StockCharts.com


Oil/USO will probably test 80 in January before dropping to 65-70 in February

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courtesy of StockCharts.com


Oil should turn down from the 06 highs of 80 and the 30 year cycle high of 09

Oil is between the 72-80 levels which have marked the 100, 200, 400, and 800% gains from the 1999 low, and a logical place to turn for the 30 year cycle high. The most probable count is that the almost 10 year rally from early 1999 to late 2008 is over and Oil will correct for a minimum of 25 to 50% in time, or 2.5 to 5 years into 2011 to 2014, but the 36 level will probably hold. 		Click here for Chart
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courtesy of StockCharts.com


courtesy of StockCharts.com


NatGas should rally towards 7 into March from its 15 yr trend line

Natural Gas crashed into its 30 month cycle low of September 09 breaking the 1995 trend line briefly but quickly rallied back above it as Oil did after breaking its 20 yr support line near 40 by 10% only to rally 100% back to 75. The same 100% snap back rally would take us to the first resistance level of 5 in 2009 and probably the 7 level by March 2010 for the next 20 month cycle high. This would return the Oil/NatGas ratio to a more natural 7:1 BTU if Oil is near 50 by then. 		Click here for Chart
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courtesy of StockCharts.com


Natural Gas should rally into 2010 from its 30 month cycle low of September 09

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courtesy of StockCharts.com


Gold must hold 1100 if we are to see a high in January

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courtesy of StockCharts.com


courtesy of StockCharts.com


Gold should make a high by January 2010 for the 11 month cycle high

Gold has been making highs every 11 months and the first move up from 1999-2001 is likely to end by January 2010 which is also a 22 month and 16 year cycle high. 		Click here for Chart
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courtesy of StockCharts.com


courtesy of StockCharts.com


Silver must hold 16 if we are to see a high in January

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courtesy of StockCharts.com


Silver should top near 20 by January 2010 for the 11-22 month cycle highs

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courtesy of StockCharts.com


Gold Miners must hold 45 if we are to see a high in January

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courtesy of StockCharts.com


Gold Stocks should top just below 200 for the 28 month cycle high in December

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courtesy of StockCharts.com

Currencies


The USD will probably pull back from 79-80 to 76-77 in January

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courtesy of StockCharts.com


courtesy of StockCharts.com


The USD should hold the 74 area and rally back to 83 as in December 91

The US Dollar turned up from support near 74 and is acting a lot like in December 1991 where it rallied for a few months before turning down to make new lows and we should see the dollar rally towards 83 into April. The current period in the 17.2 year cycle is a lot like the early 1990's and we should test and even breach the 70 area in 2010. 		Click here for Chart
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courtesy of StockCharts.com


courtesy of StockCharts.com


The Yen must hold the 107 level or it will fall to the 100 area next

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courtesy of StockCharts.com


The Yen should rally towards the 115-123 area into January

The Yen pulled back sharply from the recent highs and middle channel resistance near 115, but will probably rally again in 2010 to test the highs or even reach the all time highs of 123 by late 2010 for the 17.2 year PI cycle high. 		Click here for Chart
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courtesy of StockCharts.com


The Yen should reach 123 for the 17.2 year PI cycle high of late 2010

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courtesy of StockCharts.com


The Loonie probably topped near 98 and should drop to 90 in January

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courtesy of StockCharts.com


The CDN Dollar should top below 100 and drop towards 85 into mid 2010

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courtesy of StockCharts.com

Bonds and Rates


The 30 year Bond/TLT will probably rebound from 115 or 112 in January

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courtesy of StockCharts.com


The 30 year Bond should decline towards 105 into June 2010

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courtesy of StockCharts.com


courtesy of StockCharts.com