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The SPX has - for now - failed to break last week’s swing low
of 817. The 15 day cycle is now 14 trading days along and could bottom any time.
Ideally, what we would have liked to have seen (though it could still be out
there over the next day or two) is the 15 day cycle taking us below 817 - or
even below 806 on this move. Chart below shows the 15 day cycle, also the
price channel the component is in.
The reason that the 15 day cycle is having problems taking this
thing on down is that the 30 day cycle is in the topping phase. So here
you have the two shortest-term daily cycles in direct opposition. The 15 day
cycle is running out of time to take this thing to new swing lows - if it is not
seen in the next session or three then the cycle will give us another
sharp/quick pop higher. Since the cycle can very from 11-20 days there is no way
to know for certain what will happen over the few sessions, even though the
bigger picture remains very bearish against the 853 region - though you can see
from the chart on page 1 that the top of the channel that encloses the 15 day
cycle is now near 846 SPX CASH. We would not really even want to see this
area closed above if we are going to continue on down. The ‘cycle’ itself is
shown on the bottom of the chart - and again price will not turn on a dime just
because the cycle itself is nearing a low; if the cycle extends the low then we
will bottom from lower levels. The 80/20 rule says that 80% of a cycle’s price
drop will come in the last 20% of it’s phase. For now the best we can say is
that below 846-853 SPX CASH and we have to look for lower prices over the
near-term.
Otherwise, bigger picture will see all of this
choppiness soon come to an end. Once the 15 day bottoms and then turns higher
for a few days then the 30 day will be starting lower - and the down
pressure from the larger 60 day cycle will also soon start to take over - and
should take this thing on down to new swing lows below 806. For now look for a
bit more frustration until all the cycles get in sync in the same direction.
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