SP500 Update Nov 20th

Monday is a very important day for the markets. As can be seen on the following chart the SP500 is back to a support line starting in March then July.

This is also either the 3rd week of a new Primary cycle or the 20th week in an older one. This is very important since if we are in the 3rd week of a new primary we can expect higher highs, that is higher than the late November highs. If we are in the 20th week of an older Primary we can expect the early November lows to be broken.

Please note the markets have made lows in early Sept / Oct / Nov, so an early Dec low is quite possible. If we are looking for that low, maybe the narkets go up next week setting up that low.

Monday has some critical Astros. The Venus Jupiter sqaure is almost exact to the Marcr/Neptune midpoint. This midpoint has a history of broad range days and quick reversals. Monday also has Sun in Sagittarius and the Moon in Aquarius which is a signature for a sharp move. Will it be a reversal up or down. Don't know at this point but it may be a deciding move to tell us if we are in a new or older Primary cycle which is very important.



Watch the following support levels. If we close below then it is bearish.
DJIA 10236.79
SP500 1080.90
Gold 1129.53 cash
Silver 17.73 cash
Oil 76.08 cash

Watch the following resistance. A close above then it is bullish.
DJIA 10418.85
SP500 1107.78
Gold 1163.43 cash
Silver 19.11 cash
Oil 79.63 cash

The pennies are really not that useful but it appears very accurate with them :)

SP500Update on Nov 19, 2009

We are currently at 13 td's from the Primary Cycle trough on Nov 2. We are in the timeframe for a trading cycle trough. Trading cycles occur 2-4 weeks after a primary trough and are a good time to get in if you missed the primary trough, like I did on Nov 2.

I'm expecting 1 or 2 more days of pullback, however, the market could gap up tomorrow. It needs close watching so it does not get away from us.











I'll buy on a gap down tomorrow or if we gap up look to short at the 50% retracement of the move down on Nov 19. On the intra day note how it came up at the close to the 38.2% retracement of the move down in the morning.

Fun with PHI

The following chart shows a calculation using PHI.

It takes the value of the SP500 at the March 2009 low, which was $666, and multiplies that number by PHI to the power of 5 as (666 * .618034^5). The result in trading days is shown on the red lines. This is an indicator for a change in trend.

The next red line is November 19, 2009, and is expected to be a market turn.
Please note this calculation and many others were developed by Stan Harley. A very interesting fellow who brings a scientific approach to the markets. He can be found at http://www.harleymarketletter.com/




In addition Nov 19 has the moon in conjunction to Pluto, which is of course squaring Saturn, both being in Cardinal signs. Watch for a market move 1:30pm to 2:07pm that day.

SP500 Continued

For now we have labelled Nov 2 as the Primary cycle low with an eye out to the next week, that we could get another lower low. This maybe wishful thinking. Following is our updated chart.



Other items to note MACD is continuing in negative divergence to price and weekly volumes continue to be quite low. Where have all the buyers gone or are funds and hedge funds trading amongst themselves to drive price up.

If, however, the SP500 breaks 1100 - 1110 decisively then get long, or at least cover any shorts, as it may signal a large move up.

Other interesting things to note.

In trading days Mar 6, 2009 to Nov 13, 2009 was 1/2 the number of days from Oct 11, 2009 to March 6, 2009.

In calender dates Mar 6, 2009 to Nov 17, 2009 was 1/2 the number of calendar days from Oct 11, 2009 to March 6, 2009.

Nov 16, 2009 is 178 trading days from the March 6 low (178 /2 = 89) a fib number.

Nov 16 is a new moon from which downtrends often start. Oct 11, 2007 was a new moon.

The following chart shows a PHI time series, this time starting at Aug 11, 2009. Aug 11 was the start of the last major down move. Note the tendency for troughs to occur around the PHI dates. The next date is Nov 23, 2009.

Also on this chart the blue cicles show the new moon dates. Note the tendency for the times around new moons to denote crests from which drops start. Not all the time, but it is there. More about moons on a future post.











Following are Pivot and 2 levels of resistance and support for Nov 16, 2009. This is an old technique that often still works.

Pivot Point $1,092.19
R1 $1,099.09
S1 $1,086.59
R2 $1,104.69
S2 $1,079.69

Amidst all the noise of daily and intra-day charts it is best to look at a weekly. We are very close to a 50% retracement of the move down from the Oct 11, 2007 high to the Mar 6, 2009 low. See the chart.



To summarise we are 50% of price and time.

In Follow Up To the Previous Post

Today the SP500 appeared to make a turn up, although on low volume. It would also appear, at this point that the primary cycle low was made on November 2 in which case it would be best to clover all shorts and look to get long.

Although the SP500 did not make new highs the DJIA did. This is either a case of intermarket bearish divergence where both indexes will fall in the next couple of days or the SP500 will follow the DJIA to new highs. It would be best to monitor both.

In the current environment where the US$ is falling and apparently will not get support from the US Treasury it would be best to assume stocks and commodities are on their way up. It would take a fast and substantial reversal in the next couple of days to change this opinion. Trading is difficult!

Trading the Primary Cycle - A Lesson

In follow up to our forecast post for the SP500 we are now in a trading position where we have an important decision to be made.

To recap we have been forcasting a primary cycle low between Nov 9 - 23 and more probably Nov 13 / 16, 2009. That is we have been looking for a low in the red box on the following chart.




Now, however, the SP500 has met all the minimum criteria for a primary cycle low having just occured. It has been the minimum 2 weeks from the crest (PT on the chart) and price has broken through the 25 day simple moving average (the green line on the above chart). Should we now buy? These are the difficult decisions in trading.

My decision is that the primary low is not in yet and I'll await the Nov 13 - 16 time frame. If at any time price exceeds the high om Oct 20th, 2009 then we must realize our error, close any shorts and get long.

Why Nov 13 / 16. Nov. 13 is 1/2 the number of trading days of the move down from Oct 11, 2007 to March 6, 2009 and Nov. 16 is 178 trading days from the March 6 low. (178 is 89 * 2, 89 being a Fib number). Nov. 16 is also a new moon and the first trading after the Saturn Pluto square. Nov. 19 has the Moon conjunct Pluto at 1:30pm and Pluto will be at mid-heaven (directly overhead) at 2:07pm. All times are based on EST in New York city.