Category Archives: Uncategorized

S&P 500 Cash Index Cycle Location 07052019

We blogged last week that the market was in a confirmed bullish trend despite the trade war and Fed rate cut noises.  Last week was a holiday week so the trading volume was low.  As of now, the market is still in a confirmed uptrend.  Since the last quarter of 2018, the market has been entirely news driven regardless of the underlining fundamentals, but the cycles have been functioning as they were supposed to.  So it’s best for us to listen to the tape and ignore the noises.

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Racing for the October 2018 High

The relentless market has surprised a lot of people on the upside.  The December selloff was painful, the rise out of the low has been equally painful.  It has caught a lot of professional speculators such as the hedge funds unprepared.  Normally the market bases for a period of time around the low, seldom it pivots so quickly that produces a V-shaped bottom.

Indeed we have a V-shaped low and it is racing to take out the October 2018 high.  The October 2018 high is a 4-year cycle high, once this high is taken out, the previous 4-year cycle low is confirmed and the new 4-year cycle low to high rising phase will last at least until November 2020.  As we blogged before, we are currently in the middle of a 17-year cycle that is similar to the period of 1982-2000.  This December 2018 low is a 4-year cycle (February 2016-December 2018)  low and a half cycle low of the 17-year cycle (2009-2026).  We have steadfastly maintained a long term bullish outlook.  We have been looking very hard for entry points to deploy fresh capital for investment opportunities.  The indices continue to blow out resistance levels and now are marching for the old high.

It is 14 weeks into the current weekly cycle and it is very close to the old October 2018 high.  We still maintain the stance that the market is not going to breakout from here and enter a point of no return zone.  It will encounter resistance at the old high and enter a correction to reach below for the 200-day moving average. Back in October 1998, it made a 22.45% correction in 11 weeks to produce a 4-year cycle low, then it only took 7 weeks to take out the old July 1998 high, which was  a 4-year cycle high then.  The October 1998 4-year cycle low was confirmed in 7 weeks.  It then entered a point of no return zone to create the dotcom bubble.  This time it has spent 14 weeks already and it still hasn’t taken out the October 2018 high yet, and we are not foreseeing a dotcom bubble in the next two years, therefore this December 2018 low is very similar to the March 2009 and February 2016 lows.  It will experience a correction to provide entry points.

We have identified a few growth oriented investing ideas that are still in the early investing cycle.  We have conviction in these three companies that will be disruptive forces in the coming 4-year cycle.

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It’s Locked in a Holding Pattern

We blogged that the Fed top is here in our last post.  However, the selling pressure was abated last week.  The sellers were nowhere to be found.  The indices closed positive last week to finish a great first quarter.  With the muted price action from last week, is the market set up to launch to new heights or something else?

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It’s All About The Central Bank

When the Fed pivoted its easy money policy on January 4th earlier this year, the extremely oversold market responded with vengeance! The market participants have since pushed the market over the limit by triggering the fear of mission out motions.  The selloff occurred during the first week of March was promptly

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A short Note

We are waiting for the year-end closing data.  So the weekly blog will be out on Monday 12/31/2018.  We will be focusing on the forecast of 2019 based on how the year 2018 is closed.

Happy New Year!