Market Symmetry Part Two

The QQQ and IWM made new bull cycle highs on 3/7/14, which was the anticipated 8.6 cycle time period symmetry, as you were aware of from previous commentaries. The symmetry was 60.2 mo`s, which is 7 x 8.6, and it was confirmed by an O/B condition so the reversal probability was high.

The QQQ, following the 3/7/14 91.15 cycle high declined -8.6% [so far] to an 83.28 low at the 200DEMA zone on 4/15/14, and has since bounced +4.3% to yesterdays 86.84 close. The charts included of the QQQ, IWM, and SPX are all as of the 4/17/14 close.


The IWM made a double top on 3/4-3/7, followed by a -9.6% decline to the 108.66 low at the 200DEMA on 4/15, and has since bounced +4.4% to yesterdays 113.45 close.


Unlike the QQQ and IWM, the SPX made a 60.2 month high at 1883.57 on 3/7/14, which was also a new bull cycle high, but only declined -2.3% and then flat-lined until it made a marginal new high at 1897.28 on 4/4, before declining -4.4% to the 1814.36 low and 100DEMA on 4/11/14. It has since bounced +3.2% to yesterdays 1871.89 close.


The SPX was +2.7% last week on 4 straight up days, which reversed the previous weeks -2.7% decline. The index made it 5 in a row yesterday as it finished +0.4% to 1871.89 on the lowest NYSE volume this year at 603mm shs, and a daily trading range of only 7.4 points. In fact, the advance to the marginal new 1897.28 high was also on declining volume, and it was led by a narrow universe of S&P 500 stocks.

It is hard to be anything but extremely defensive and negative about the current extended market based on economic and financial reality, but it is an artificially Fed inflated market, unlike anything we have ever seen, but even that will not stop the coming inevitable significant bear market replay that we saw in 2000 and 2007.

The SPX has the same O/B 123 monthly chart negative  5 RSI divergence as it did in 2007, except that this time the advance has been +184% from the 667 3/6/09 667 bear market low thanks to the Fed.

The SPX took out the 1576 bull cycle high in April 2013, and there hasn`t been a close below the low of the high month since then. When it does happen that will activate the long term monthly RST sell pattern that those of you familiar with my strategies are aware of. There is also Pi timing symmetry in the end of May, and the first weeks of Aug and Sept 2014.

By taking a free one-week trial to the Trading Service you will see the various trading screens, including the VB screens for the S&P 500 and the leading ETFs, in addition to viewing the daily basic strategy examples in the archives. There is also a section that explains using the VB`s.