There are many market observers who subscribe to the idea of the pattern from 1930 following the crash into November of 1929. That pattern showed a multi-month rally up into April and then off the cliff once again. I think there is a better chance that March/April will show a turning point with a low and that by May the market may be poised to head higher when it is seen that the 1930 scenario is not going to play out.

Cycles suggest another turning point in August from which an advance may occur. So it is interesting, that while consensus on the Street seems to be for a countertrend rally in the first half that discounts the beginning of an economic recovery in the second half (a possible January rally notwithstanding), the cycles and sections of past market periods that I am focusing on suggest something different.

The bottom line is that an improvement in the market should occur slowly and gradually. I doubt the market is going to fly off the handle with a new bull market any time soon but at the same time I also suspect that the talk of a Depression is greatly over done.

March shapes up as one of the worst months of the year (just the idea of an April Advance shaped up as one of the best months of the year in 2008 in my work). June may prove to be another difficult month, but basically, it looks like after May the market should base and improve with a solid advance after a turning point sometime in August. It will be important to watch the behavior of the market on the 2 year anniversary of the October 2007 peak which will also be the 7 year anniversary of the 2002 low. It is possible to see weakness from that point but there is a chance the cycles could invert.

90 degrees from the October 10 low is the first full trading week of January which coincides with 60 degrees from the important November 4th peak. 180 degrees from the critical May 19th 2008 high was the low last November. So, mid-Feb which is 270 degrees from last May and 90 degrees from November 20th, may be a time to look for a decline to accelerate if in fact the market is due to be magnetized into a decline in March (early April). 144 degrees from the May 19th peak was mid- October while 144 degrees from the November 20 low gives mid April 2009. It appears the most important period to observe will be 540 degrees from the all time high in October 2007 which roughly coincides with mid April 2009. In my study of the S&P from its inception 540 degree moves in both time and price have proved to be important culmination moves and corrective moves. In other words if we rally up into April then there is a danger the analogue from 1930 may play out. That is not my bet at this juncture. If March sees a decline then April may turn out to be a test/consolidation of any March sell off.

Any rallies in 2009 will still occur within the framework of a longer term bear market. Although price wise 2008/2009 may indicate a trough for the stock market, the market should remain range bound and relatively flat for the 540 degree period (18 months following the November 2008 low). At best. That is within the context of an advancing phase from August. If the expected March low is higher than 850 S&P and the expected low into August is higher than any March low it would be a bullish indication for a rally phase. Likewise, the nature of any declines will tell the position of the cycles: if the declines are weaker and shorter lived during the down phases it will also speak to the significance as to the November 2008 low which was a test/undercut of the 2002 low in the same way that 2007 was a test/overthrow of the 2000 high proved by the intensity of the declines following that test failure.

The above is a roadmap. The tale of the tape will be told by its own behavior which can best be interpreted by The Swing Chart Method, ie the behavior of the wheels within wheels of time as the primary and secondary trend do battle.