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Major Five-Year High?
January 17, 2013 10:26 AM
JEFF COOPER TALKS TECHNICALS
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Is it just madness keeping us afloat?
I can calculate the motion of heavenly bodies, but not the madness of people.
Madness is rare in individuals -- but in groups, parties, nations, and ages, it is the rule.
Once again, some big fund came in to liquidate and perhaps rotate into a few other names.
This is evidenced by the fact that there is little follow-through in individual names from one day to the next. Bonds crept higher, indicating that this big fund is largely going to cash.
(INDEXSP:.INX) is frozen at the old September highs like a deer in the headlights .
Following the close, I received a note from a friend:
“Closes for the past five days -- 1472, 1472, 1471, 1472, 1473. This ties to 910 X 1.618.”
The market seems to be waiting for something. What that something is, we don’t know.
910 is the range of the October 2007 all-time high to the March 2009 low. 1.618 is Phi, the Golden Ratio which reflects a commonality found in many things in the universe.
We know that there are many key cycles in this time frame. We know that there are many key price levels in this area. We know that the current diagonal on the S&P typically has a quite bearish resolution.
Perhaps the takeaway is that if the market does not turn down in this time frame, it is in a brave new bull world.
However, the contrary is that we are at/near the most important high in 5 years.
Usually, these ‘flats’ after a strong advance resolve with a 1 to 3 day spike and a reversal back through the ‘flat’, followed by a major correction.
If the trend is still bullish, that correction will be a buy.
Alternatively, the message is a deep leg down to levels that few if anyone are contemplating.
We’ve spoken often about the significance of the 60-month or 5-year cycle which is a fractal of the master 60-year cycle.
The S&P has made a new 5 year high. It has marginally exceeded the high from January 2008 which is when the crash started. (there is a typo on the chart below -- the Jan 2008 high should read 1471.75
So the S&P is resonating off that level, which ties to a Fibonacci fractal of a range that had yet to play out into a low 14 months later (2 X 7).
Interestingly, if the S&P makes (spikes to?) a new intraday high above last September’s high and stabs back down in short order, it will trigger a monthly Soup Nazi sell signal.
Why? As on the dailies, such a signal is rendered when a new 20-period high (September) is followed by a pullback and then a new failing high occurs at least 4 bars later but within the 20-bar period.
Note the horizontal range from the first major higher low in early July 2010 ties to the 2009 lows.
Again, this indicates that current levels are key.
The S&P is also approaching 540 degrees in time from a crash low from August, 2011.
540 degrees is important in price and in time since 540 is a true square or cube with six 90-degree angles.
) has been in a waiting game since its all-time high in August 2011 and is approaching 540 degrees in time from its high.
So equities made a major low in August 2011 -- albeit there was an undercut low 60 days later in October 2011 -- like the undercut low in
Is gold making a low here with stocks topping?
A world view of the planet’s markets through the
or GDOW also shows the significance of the November low. As you recall at that time, we noted in this space that a cluster of turning points due in mid-November could lead to the
Mother of All Short Squeezes
We will walk through the factors that forecast the major November low in the weekend report again, with a few new twists/additions which will further benefit you in having confidence at major turning points.
The question is whether the market is satisfying a big top here or whether a breakout above 1500 elicits a run for the roses to 1600 in the first quarter, mirroring the blowoff into March 2000.
360 degrees up from the November low on the GDOW ties to 2060.
A 90-degree overthrow equates to around 2100 which ties to the upper rail of a rising channel.
The significance of the November cycle was global and also shows up in the
iShares China 25 Fund
) which is like the
) in China.
The Yearly Swing Chart turned up on trade above the Feb 2012 high in FXI. The normal expectation following a turn up in a big wheel of time like the yearly would be a reflex pullback to support. In this case, that would tie to a pullback to a rising trendline to around 39 and the prior major swing highs.
Of course, if the FXI knifes below the old highs (A) with authority, it could indicate a false breakout which ties to the false breakout on the 40-year cycle on the Dow 30 in 1973.
Above we noted the significance of the 910 point S&P range from 2007 to 2009 and the 40-year cycle.
Something bad seems to happen in the markets every 40 years. And every other 40 years, something VERY bad happens.
We’re on the very bad side of that cycle.
Remarkably, 910 is 90 degrees square January 11 on the Square of 9 Wheel, with January 11 being the false breakout peak in January 1973.
No positions in stocks mentioned.
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