Market Breadth Data******************************

Saturday, September 30, 2006

Here are my CIT dates for October.

You'll notice the cluster of dates October 2nd - 4th.
If prior history is any indication, it tells me that the market will remain choppy within this time frame before a new trend reasserts itself.

Friday, September 29, 2006

What better way to mark the EOM and EOQ than with a new all-time high for the DJIA?

That's what I expect to happen on this last for September CIT date.

In the meantime, the index is getting overbought, but there is still room for one more push up.

Early October should offer some interesting opportunities....

Wednesday, September 27, 2006

Today, being a CIT date, coinciding with a EOM and EOQ period, I expect the index to move sideways/down before the next turn.

The October CIT dates will be published over the week-end.

Tuesday, September 26, 2006

Here's the CIT update.
The Zero Lines from Summer 2003 continue to contain the price action pretty well.

Saturday, September 23, 2006

Sometimes it helps to step back from day-to-day action and look at the big picture

Friday, September 22, 2006

Yesterday's rejection at resistance, accompanied with negative divergence in market internals, was a clear sign that the uptrend is in trouble.

From a classic TA point of view, the SPX is confined by the boundaries of the rising wedge and resistance from the May 8th high.

From a Gann perspective, the index is still controlled by the Zero lines from May 2001. Resistance is at 1325, while support is at 1310 and 1303. These numbers increase by 1 point per TD.

In my preferred scenario I missed again the September 20th CIT date. I guess my subconscious is unwilling to accept that date. When taken into consideration, however, it defines the action so far pretty well, and points to Sept. 22nd as a low. Wouldn't that come as a surprise to many?

Wednesday, September 20, 2006

The last three days were a perfect example of what I like to call a "stealth correction" -- the indices moving higher or sideways on deteriorating internals.

Everybody thinks they are overextended while, in fact, they are getting oversold without this being visible to the naked eye.

Tuesday, September 19, 2006

Going into the CIT date the market is right in the middle of the overbought/oversold range.

The indicator is displayed in a P&F format just because it makes it more intuitive and comprises the same elements as the overbought/oversold oscillator displayed at the beginning of this blogg.

The preferred scenario going forward is a pull-back into September 19th, a rally into the 22nd, and another turn.

I should note that a CIT doesn't have numeric characteristics; i.e. when a CIT comes it doesn't mean that the index should drop or jump a certain minimum number of percentage points. Rather, it means that if the index was moving up to that point, it should now move sideways or down, and vice versa -- if the market was flat it should move up or down. Whether the move will be strong or weak is determined by the overbought/oversold nature of the market going into the CIT date, and the time-span before the next CIT date.

Monday, September 18, 2006

Everything seems to be coming nicely together.

For the record, it seems that I missed a CIT date for September 20th.
Since it wasn't included in the original chart, I won't change that one now.
It could happen when you work with 5 years worth of CIT dates.

By the way, the system was backtested for 100+ years.

I've given myself until the end of the year to test in public how the system performs in real time. After that I'll reassess and decide what to do with it.

Friday, September 15, 2006

Waiting to exhale....

Everything is unfolding according to plan and on schedule.
The indices are in the upper third of their overbought/oversold range.

When you take the guessing game out of the picture, trading becomes a matter of patience, discipline and execution.
Cheap thrill seekers should look elsewhere for entertainment.

Thursday, September 14, 2006

So far I’ve tried to stay away from giving price targets, simply because the focus of this blog is time targets.

While waiting for the next CIT date, however, it may be interesting to look at the above trend lines which originate in the period May-September 2001.

Wednesday, September 13, 2006

Oversold markets + CIT Date = Strong Move

At this rate the indices will get overbought in 2 days.
This being option expiration week, however, things are expected to cool off a little bit.

Tuesday, September 12, 2006

Year-end Forecast

Since everybody seems to have a favorite year-end model, it may be a good time now, while waiting for the next CIT date on Oct.19th, to publish my own year-end forecast.

While I'm more in agreement with Nenner's forecast rather than with Neely's or the NAHB comparison, mine seems to call for a strong rebound a little earlier than Nenner does.

We'll see....

Sunday, September 10, 2006


The purpose of this blog is to use cycle analysis to identify future Change in Trend (CIT) or swing dates for the US indices.

Most of the technical analysis work will be done using proprietary tools and methods developed during the last 10+ years.

The SPX will be used as a proxy, although the original work is done on a different set of data.
The analysis should be of best use for futures, options or ETF traders.

Comments for the week of September 11th.

There is one CIT date for this period, and it actually falls on Sept. 10th.
This, right from the beginning, illustrates one of the problems that inevitably will be encountered with this type of analysis -- some of the CIT dates will fall on weekends or public holidays. However, it shouldn't be of much concern, since once we know that a change in trend is imminent, the problem boils down to whether to act before or after the CIT date, or even both.

In solving this problem, I use a particular type of oscillator, which tells me whether the market is oversold or overbought going into the CIT date.

The screencapture shows this indicator in action.

Going into Friday, it was heading into oversold readings but had not turned up yet.
Therefore, I think that this is one of those cases when it's best to take half a position before the CIT date, and half a position on any weakness after the CIT date.

The next CIT date is September 19th.

Good luck.

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