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  AstroCycle Analysis of 1/15/10  

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Executive Summary

Last week I expected the SPX to peak below 1150 early and decline to 1115 by Friday but the mid week rally kept us from breaking below 1130. This week I expect the SPX to rebound early in the week but fail to make new highs and start a decline towards 1115 by Friday. Plan B has the SPX holding 1130 early in the week and making new highs towards 1170 by Friday.

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

Trend is bullish to mixed for Tuesday
The Tick lines made a deep low near 1:00pm on Friday very much like the deep low near 1:00pm last Tuesday and started a rebound that should take us close to the October trend line just above 1140 on Tuesday. The last two Options expiration Friday gave us a little more than a 1% rebound the next day and that would send us pretty close to testing the highs again, but the 4 day and 9 hour cycles are both pointing down into the close on Tuesday and the rebound may abort near the 50% level of 1141. Much of what will happen this week depends on whether the 8 day cycle has inverted last Thursday morning and will send us down into this Thursday morning for Jobless Claims, or the inversion was just an expiration phenomena and the 8 day cycle will take us into the regular high Thursday and Friday if it is one day late as the last two were. The Breadth Pattern Matches are too few and bearish but my bias for Tuesday is bullish above the previous low near 1131 but I may skip voting.

8 day cycle Thursday morning (high?) and next Wednesday (low?)
The 8 day cycle inverted into a high last Thursday morning but the oversold Tick lines suggests it will return to its usual high this Thursday morning for the expected 4 day cycle high. The low of 1131 on Friday may be enough but one of the lower levels like the August trend line near 1127 and the Fib levels of 1121 and 1115 are more likely. If we reach 1115 for the expected 4 day cycle low of Wednesday morning, then the 8 day cycle has probably inverted and we would most likely continue lower into the Jobless Claims report Thursday morning and the next 8 day cycle of Wednesday morning the 27th would probably turn out to be a high instead of a low.

Trend is bearish to mixed for week ending January 22nd
Most indicators have turned bearish except for the blue Nyse Tick line which has not broken its bullish trend yet but is also oversold suggesting we will break below the August trend line and previous high support near 1130 and drop to one of the three previous lows and Fib levels near 1115, 1100 and even 1085 by the next Full Moon and end of month. If we hold the August trend line just below 1130 this week, then we should quickly rally to test the highs and if we can stay above 1151 the rally would most likely extend to the 1170 area. 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 are now in a Wave 3 that should take us to the next Fib target of 1170 or higher by the time Wave 4 and 5 complete.

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 Ticks were a lot more overbought than the Nyse and any decline should start with Tech stocks leading the way. The red Put/Call line remains low and overbought suggesting the 1150 area will be the high of January and a decline to the previous range of 1115 to 1085 is likely into February.

The next move down should take us into the Full Moon of February 28th
Most indicators turned up after stalling in November and could support a further move up to the next Fib target near 1150 and 1170 before we pull back into the expected late February cycle low. 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 January 11-10
Weekly BSI is bullish since December 22-09
but one more bad day from bearish
Yearly BSI in a Bear Market since January 4-08
but getting close to a Bull Market




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 for other reasons.
Firebird - Your Score: 58.3% [Ranking]
Last 22 sessions: corrects=7, incorrect=5, omissions over limit=0.
SessionOpinionS&P 500Score
01-15-2010bearish-1.1%
01-14-2010bearish+0.2%
01-13-2010omission+0.8%-
01-12-2010bearish-0.9%
01-11-2010omission+0.2%-
01-08-2010bearish+0.3%
01-07-2010bearish+0.4%
01-06-2010omission+0.1%-
01-05-2010omission+0.1%-
01-04-2010omission+1.6%-
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%-

Moon, Cycles and More


An overbought New Moon

New Moons are statistical highs and the blue Tick line is already turning down ahead of this New Moon Eclipse but not from very overbought levels, while the red StochRSI line turned down from very overbought levels giving us a medium risk New Moon short trade near SPX 1140-1150 (entered at 1148) with a stop near 1155 to start and keep the stop 5- 10 pts above the lowest SPX level since the New Moon which is near 1141 by the close on Friday. Potential targets are near 1130, 1115 and 1085 if the decline lasts into the next Full Moon and end of month, but the Top Formation on the right implies a break below the 1030 level by the Full Moon of February 28th.


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 August-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 but not making new lows

The Put/Call and white Trin lines turned bearish from overbought

The Slope and StochRSI are turning bearish and not that oversold

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The Volatility is turning bearish with a false break of the lower channel

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The top red NDX vs SPX ratio is bearish but stalling a bit

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The New Highs and Lows with ratio are turning bearish but not breaking trend yet

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The Up and Down Volume with ratio are turning bearish but not breaking trend yet

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The 5 and 40 day Trin turned bearish but the 5 day Nasdaq is stalling

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Stocks above their 50/200 day MA are turning bearish from overbought

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Stocks on a Point and Figure buy signal are turning bearish from overbought

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The McClellans are turning bearish near a cycle high and Geometric resistance

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courtesy of StockCharts.com

Equities


Trend is bullish to mixed for Tuesday

The Tick lines made a deep low near 1:00pm on Friday very much like the deep low near 1:00pm last Tuesday and started a rebound that should take us close to the October trend line just above 1140 on Tuesday. The last two Options expiration Friday gave us a little more than a 1% rebound the next day and that would send us pretty close to testing the highs again, but the 4 day and 9 hour cycles are both pointing down into the close on Tuesday and the rebound may abort near the 50% level of 1141. Much of what will happen this week depends on whether the 8 day cycle has inverted last Thursday morning and will send us down into this Thursday morning for Jobless Claims, or the inversion was just an expiration phenomena and the 8 day cycle will take us into the regular high Thursday and Friday if it is one day late as the last two were. The Breadth Pattern Matches are too few and bearish but my bias for Tuesday is bullish above the previous low near 1131 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



8 day cycle Thursday morning (high?) and next Wednesday (low?)

The 8 day cycle inverted into a high last Thursday morning but the oversold Tick lines suggests it will return to its usual high this Thursday morning for the expected 4 day cycle high. The low of 1131 on Friday may be enough but one of the lower levels like the August trend line near 1127 and the Fib levels of 1121 and 1115 are more likely. If we reach 1115 for the expected 4 day cycle low of Wednesday morning, then the 8 day cycle has probably inverted and we would most likely continue lower into the Jobless Claims report Thursday morning and the next 8 day cycle of Wednesday morning the 27th would probably turn out to be a high instead of a low.

Click for Printable Chart

courtesy of StockCharts.com


Trend is bearish to mixed for week ending January 22nd

Most indicators have turned bearish except for the blue Nyse Tick line which has not broken its bullish trend yet but is also oversold suggesting we will break below the August trend line and previous high support near 1130 and drop to one of the three previous lows and Fib levels near 1115, 1100 and even 1085 by the next Full Moon and end of month. If we hold the August trend line just below 1130 this week, then we should quickly rally to test the highs and if we can stay above 1151 the rally would most likely extend to the 1170 area. 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 are now in a Wave 3 that should take us to the next Fib target of 1170 or higher by the time Wave 4 and 5 complete.
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 Ticks were a lot more overbought than the Nyse and any decline should start with Tech stocks leading the way. The red Put/Call line remains low and overbought suggesting the 1150 area will be the high of January and a decline to the previous range of 1115 to 1085 is likely into February.
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 to the next Fib target near 1150 and 1170 before we pull back into the expected late February cycle low. 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 should decline into early and late February

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 will probably not make new highs and decline into February

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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 will probably not make new highs and decline into February

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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 near 200 and drop to 130 from the 28 month cycle high

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courtesy of StockCharts.com

Currencies


The USD will probably pull back from 79-80 to 75-76 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 should rally towards the 115-123 area in 2010

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 mid or 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 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 to 117-118 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