6/17/09 - AstroCycle Update
Executive Summary
Weekly Update
Last week I expected the SPX to
pull back to 875 but we held the 925 level as I also suspected was possible and tried to rally to 970.
We continue to exceed the 944 level raising the possibility of reaching the Fib extension near 970 this week
and/or the 1007 level by the end of the quarter, but this 950 area was key in 1998 and 2002-2003 and the risk
of a 50-75 point pull back from here is quite real and is my favored forecast.
Plan B has the SPX holding the 1998 lows of 925 and rallying to the 970 area.
Weekly Technical
The Ticks and StochRSI turned bearish and are not that oversold but the price is trying to turn up for a
New Moon high leaving a big divergence that should resolve in a 50 point pull back to the lower parallel
channel near 900, like we saw at the end of previous 13 trading day rallies. However, as long as we hold
above the 1998 lows near 925 this week, we can not rule out a Fib extension of this rally to the 970 level
for a June 22nd New Moon high.
Wave Count
The March 6th low was most likely a Wave B low and we are now completing a Wave C rally that will finish Wave 4
up from the November 21st low. Wave A up from the November low went 203 points in 6 weeks, Wave B went down 277
pts and took 8 weeks, and Wave C has now gone 290 points in 14 weeks and is probably complete or will be done
between 970 and 1007 by the end of quarter like the 16 week 9/11 rally that ended with the quarter.
Daily Update
Most indicators are trying to turn bullish as the fifth wave extended to the 900 level before another rebound
started, but the cycles are possibly inverting making forecasting difficult. The high Put/Call and double bottom
in the Tick lines makes us oversold enough for a good rebound, but the Ticks are still in a downtrend and if the
rebound fails to exceed the 1998 lows near 925 we would most likely drop to the February highs near 875 before
another rebound starts.
Both Tick lines made a second deep oversold low with very high Put/Call lines that should give us a good rebound
soon, but most indicators remain in a bearish trend that will need to be broken before we can rule out another
drop to the February highs near 875. Since Friday June is 15 weeks from the low on Friday, March 6th and 30 weeks
from the low on Friday November 21st, we could end this decline on Friday June 19th. This could also be a typical
panic sell-off into 3 days before the Cardinal New Moon of Monday June 22nd, and would setup a sharp rebound into
the expected cycle high of next Tuesday June 23rd.
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Breadth Summation Indexes (BSI)
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Next Day Forecasting Accuracy
Forecasting the close can be difficult at times, and you can use my recent performance on the right as a guide
to the accuracy of my current vote, but I may skip voting if too cautious and my vote for
Thursday is bullish but cautious
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Firebird - Your Score: 53.8% [G100 Ranking]
Last 22 sessions: corrects=7, incorrect=6, omissions over limit=0.
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| Session | Opinion | S&P 500 | Score |
| | | |
| 06-17-2009 | bullish | -0.1% |  |
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| 06-16-2009 | bullish | -1.3% | |
| | | |
| 06-15-2009 | bearish | -2.3% |  |
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| 06-12-2009 | bearish | 0.1 | |
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| 06-11-2009 | omission 1/10 | 0.6 | - |
| | | |
| 06-10-2009 | omission 2/10 | -0.3% | - |
| | | |
| 06-09-2009 | omission 3/10 | 0.3 | - |
| | | |
| 06-08-2009 | bearish | -0.1% | |
| | | |
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Short and Medium Term Market Breadth
The Ticks are bearish but oversold enough for a rebound to start soon
The Put/Call lines are bearish but close to a trend line
The Momentum indicators and the Nasdaq 100 are bearish but stalling
Click for Printable Chart
courtesy of StockCharts.com
Cycles and Wave Counting
Full Moon high and New moon low?
The Full Moon of June 7th will probably be at least a short term high, which could also turn into a nasty decline
towards the triple witching expiration week of June 19th, since the New Moon of June 22nd is near a Cardinal Date
and can generate extreme volatility and even panic selling three days before the New Moon. This New Moon is
highly charged being directly opposed to Pluto, and 120 degrees from Jupiter and Neptune retro, and 90 degrees
from explosive Uranus. Since Venus and Mars are also together and 120 degrees from Saturn, all these market
moving planets are likely to have quite an effect on an otherwise quiet market. Some of these Venus-Mars-Saturn
angles have a history of dramatic moves with the May 8, 06 high, the Mar 9, 07 low, and the Nov 30, 08 high
as examples.
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courtesy of StockCharts.com
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The Nasdaq 28 month cycle high suggest weakness in June/July
May 2009 is a 28 month cycle high in the Nasdaq, and in the last 30 years only two out of six signals were early.
The May 1983 cycle was one month and 10% early, and the January 1992 cycle was one month and 3% early. Since we
have already exceeded the May 2009 high of 1774 in the Nasdaq by 6% we may be in one of those special extensions,
but the odds remain 2 out of 3 that we close below Nasdaq 1774 in June, and even more likely in July.
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Click here for Chart
Click for Printable Chart
courtesy of StockCharts.com
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Equities
Outlook for Thursday is bullish to mixed
Most indicators are trying to turn bullish as the fifth wave extended to the 900 level before another rebound
started, but the cycles are possibly inverting making forecasting difficult. The high Put/Call and double bottom
in the Tick lines makes us oversold enough for a good rebound, but the Ticks are still in a downtrend and if the
rebound fails to exceed the 1998 lows near 925 we would most likely drop to the February highs near 875 before
another rebound starts.
See the NDX 1 minute chart here
and the Dow 1 minute chart here
Click for Printable Chart
courtesy of StockCharts.com
Cycle turns on Wednesday, Friday and next Tuesday
Both Tick lines made a second deep oversold low with very high Put/Call lines that should give us a good rebound
soon, but most indicators remain in a bearish trend that will need to be broken before we can rule out another
drop to the February highs near 875. Since Friday June is 15 weeks from the low on Friday, March 6th and 30 weeks
from the low on Friday November 21st, we could end this decline on Friday June 19th. This could also be a typical
panic sell-off into 3 days before the Cardinal New Moon of Monday June 22nd, and would setup a sharp rebound into
the expected cycle high of next Tuesday June 23rd.
Click for Printable Chart
courtesy of StockCharts.com
Outlook for week of June 19th is mixed to bearish with a big divergence
The Ticks and StochRSI turned bearish and are not that oversold but the price is trying to turn up for a
New Moon high leaving a big divergence that should resolve in a 50 point pull back to the lower parallel
channel near 900, like we saw at the end of previous 13 trading day rallies. However, as long as we hold
above the 1998 lows near 925 this week, we can not rule out a Fib extension of this rally to the 970 level
for a June 22nd New Moon high.
See the NDX 10 minute chart here
and the Dow 10 minute chart here
Click for Printable Chart
courtesy of StockCharts.com
Wave C of 4 may be over close to the 9/11 lows and January highs of 944
The March 6th low was most likely a Wave B low and we are now completing a Wave C rally that will finish Wave 4
up from the November 21st low. Wave A up from the November low went 203 points in 6 weeks, Wave B went down 277
pts and took 8 weeks, and Wave C has now gone 290 points in 14 weeks and is probably complete or will be done
between 970 and 1007 by the end of quarter like the 16 week 9/11 rally that ended with the quarter.
Click for Printable Chart
courtesy of StockCharts.com
Wave 5 should start in June or early July and take us to new lows in 2009
The start of each major wave down since the all time high of October 07 can be seen clearly in the high Tick lines
on top and the low Put/Call lines just below, and is confirmed more loosely with the Trin line at the bottom.
All indicators are overbought, especially for a bear market, and unless we are starting a new bull market,
these readings should send us lower into June and probably to new lows by October.
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Click here for Chart
Click for Printable Chart
courtesy of StockCharts.com
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Sentiment for the SPX suggests new lows in 2009
The blue Call buying line is now making a double top near the highest level in years, and is considerably higher
than it was the last time the SPX traded near 944 in January, leaving us more vulnerable to a deep decline now
than back then. Despite the fact that we keep making deep new lows with each decline, the Call buying remains
at higher levels of optimism than at the October 07 highs and will eventually require a significant decline in
2009 to take it back down to the levels seen in 2008.
See the Nasdaq daily chart here and the
Dow daily chart here
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Click here for Chart
Click for Printable Chart
courtesy of StockCharts.com
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Australian market should pull back into September
The Australian market like most others broke above the resistance near the 4000 level and is possibly targeting
the Obama election high near 4300 but it will need to hold the 4000 level on any pull back to make that possible
before a much larger pull back to the 3250 area by September.
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Click here for Chart
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courtesy of StockCharts.com
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Commodities
The DBC/CRB should pull back into early July
The CRB/DBC is climbing with a divergence in June and the cycles suggest we will eventually decline to the
21 to 22 area by early July to resolve the condition.
Click for Printable Chart
courtesy of StockCharts.com
Oil/USO should pull back into early July
Oil and the USO should pull back towards the 60 area by early July, but it is not diverging as much as the
DBC/CRB and may take longer to break down although it makes up 60% of the CRB.
Click for Printable Chart
courtesy of StockCharts.com
Gold should pull back into early July
Gold is breaking geometric support and the indicators are all turning bearish with the expected pull back
from the cycles, but I doubt it breaks the 1980 highs near 850 in this pull back.
Click for Printable Chart
courtesy of StockCharts.com
Gold should pull back into December
Gold should pull back and continue to consolidate near the 1980 highs into the 4.3 year cycle high of the USD
near December before the breakout and a large Wave 3 up to the 2000 level and above starts in 2010.
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Click here for Chart
Click for Printable Chart
courtesy of StockCharts.com
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Silver should pull back into December
Silver should pull back to the 12 area from the 1993 highs near 16 into the 4.3 year cycle high of the USD
near December before a large Wave 3 up to the 1980 level of 40 and above starts in 2010.
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Click here for Chart
Click for Printable Chart
courtesy of StockCharts.com
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Currencies
The US Dollar should rebound to the 0.83 level in June
Click for Printable Chart
courtesy of StockCharts.com
The US Dollar should make the low of the year by late July
The USD is already coming close to the 0.77 area targeted for a Wave B low for the 4 month cycle low in late
July, which will probably be the low of the year before a Wave C rally back to the 0.90 to 0.92 area into
December for the 4.3 year cycle high of early 2010.
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Click here for Chart
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courtesy of StockCharts.com
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Bonds and Rates
The 30 year Bond should rebound into July
The 30 year Bond appears to have completed 5 waves from the April 1st high and should move up to the top
parallel channel near 120 by July
Click for Printable Chart
courtesy of StockCharts.com
The 30 year Bond is probably making a low near 112
The 30 year Bond is rebounding from the 2008 support area near 112 and will probably start to move towards
the 125 to 130 area by year end, but it may test the 112 area again in late July.
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Click here for Chart
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courtesy of StockCharts.com
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High Grade Corporate Bonds should decline into year end
High-Grade Corporates are priced for perfection, and that is definitely not the current environment or even
the one going forward, and the next crisis which is likely to be the upcoming GM bankruptcy will probably
bring a dose of reality and take us down into the 80's.
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Click here for Chart
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courtesy of StockCharts.com
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