My previous post noted the SPX has over the last several months a very reliable 42 trading day cycle of bottoms. The next cycle bottom is due on 2/4/20. Periodic cycles can have leeway, in this case a leeway of two trading days is acceptable, so its possible an SPX bottom could be in place on 1/31/20. If not, watch the 30 minute P/C ratio - chart symbol PC. Investors Business Daily uses the PC level of 1.15 as an alert for possible bottoms. The two largest SPX corrections on the chart illustrate that when PC goes above 1.15 bottoms can form. On 1/31/20 the RSI on the PC Ratio hit its highest level since the tiny 12/3/19 bottom which is evidence that an SPX bottom could already be in place. However the PC ratio could continue to rise above 1.15 with the RSI diverging against the high it made on 1/31/20.
Be on alert February 3rd to the 6th, if the SPX goes below its low made on 1/31/20 with a PC ratio above 1.15 it could be a fantastic opportunity to go long stocks.
More probable that 42 day cycle (2/4, recent low 1/31) didn't register a low but a high with a Gann angle as previously stated between 2/5-2/6. Though there were 5 waves up in finality, but there are now 5 waves down possibly denoting a trend change. Cycles can suddenly disappear, though useful cannot be relied upon by itself.
Thanks for the comments. Please see my 2/8/20 post.
The 42 day cycle low registering as a high is referred to as a cycle inversion. It is a supposed phenomenon of periodic cycles and I'm very dubious of the concept, if you have an example of a projected periodic cycle
bottom becoming a top please post a chart illustrating the cycle change.
My recent Fibonacci time cycle post on the DJI noted that the projected March 2021 turn could be a top or a bottom. This is not an inversion of the cycle. Fib time cycle analysis only indicate a potential turn - you won't be able to determine if it could be a bottom or a top until the market approaches the target date.
SamSzulc
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Alternatively, the 42 day cycle could be registering a high rather than a low. So far I count 3 waves up on most major indices with exception to the Nasdaq.The next 2 days are a Gann angles from the winter solstice.
SamSzulc
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@SamSzulc, Non-confirmations abound with Dow and S&P though they more than filled gaps. Buying climaxes today on new highs in Nasdaq indices extraordinary volume with Tesla 5x volume (down $83 from intraday=all time high. lower in after market). Though it's just 1 day, coming into a cyclical period/news cycles (Trump State of Union and acquittal to anesthetize public) = potential trend changes to the downside.
SamSzulc
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@SamSzulc, Tesla now down $213 from yesterday's all time high! Nasdaq 100 has given up 130 points from all time high made this morning at market open then a reversal, negative on day so far. 2/5 Gann angle.
The_Unwind
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One thing to keep in mind,
The market will often surpass upside and downside price objectives,
resistance and support zones,while it increases the "disbelief' factor of the crowd.
The last day of January 2020 massive sell off by big money,appears to be a climatic initiation move
thus one should be very cautious,about buying into any immediate'" crowd convincing" snap back rally.
I enjoyed your"article on"sentiment" in the February 2020 issue of "Stocks and Commodities".
Keep up the very good work.
Hi
Thanks for the great comment. Yes, there could be a downside move that could push the PC far above the most recent extremes.
As I've noted in prior posts if the SPX declines more than 5% from its recent high it could be a caution sign of a larger developing bear move.
Thanks for the compliment about my recent article in S&C. So far the response to that article has been universal praise.