Week of August 23

For stocks the last two calls of Aug 9 and Aug 19 have been right on. Oil has also turned lower; however, Gold and Silver have not turned down although Friday Aug 20 may have been the start of a turn.

Following is a daily chart of the SP500. It is our working chart and therefore quite busy. There are multiple fib retracements shown based on different highs and lows. Note the low today around 1062 (green). If this level fails we are looking at the 1040-1042 area quickly. We may be near the trough (or close) of the 1st major cycle of the primary cycle. As noted we are in the 7th or 8th week. Next Monday and Tuesday, Aug 23/24 are critical in determining short term direction. It appears the 1100 area will act as firm resistance. Any quick move up, which cannot break through 1100 should be shorted.

Cycles and technicals are not very definitive. The busy Astro period is in the process of ending.

Generally speaking the whole market is weak and down is the easiest path. We are sitting on shorts, awaiting Aug 23/23 action with an eye toward Sept 1/3 for a short term low.











Looking back to the March 2009 low and calculating fib time series from the low we get the following chart. The previous fib counts (red lines) have been close to lows. The next fib count is Sept 1/3. We are looking for a low around the Sept 1/3. Keep in mind these can invert.











Looking at a fib time expansion from the Feb 5, 2010 low to the April 26, 2010 high we get August 27th at 1.618 (red lines). On the same chart we are showing the 30 cd cycle (blue lines). This next occurs on Sept 3, 2010.












More on Oil and Gold later

As we are looking at these short term charts we should keep the big picture in mind. Following is a monthly log scale chart of the DJIA showing an approx. 17.6 year chart. Note the successive swings from up to down. As noted on the chart, this is much more powerful on an inflation adjusted chart. Note the cycle we are in. We are in a bull market rally in cyclical bear market.