1/10/14 and Another Look at Time and Price Projections for Stocks

[1/6/13 edit: I noticed there are two typos in annotations on the first Valueline chart. It should say "4392 is where DE=FG" and "4361 is where DG = 2*BC"]

Well, the markets wasted no time in ignoring the confluence of price projections on DJIA noted in the last post.

With some sentiment readings like Investors Intelligence with bull/bear spreads at all-time highs, I don't think breaking above price projection points is a reason to turn bullish at this point. Rather, I think one has to look for the next compelling price and time projections that may mark a turn.

I did some analysis on the Valueline Arithmetic index and found some very compelling price symmetry and Fib expansions in log and arithmetic scale that point to an area not far above the close of 4357.63 on 12/27/13. The range of projections is from 4360 to 4560 with the majority pointing to 4440 area. If we trade up into this range on or near 1/10/14, I would think the odds of some sort of top forming increase significantly.

As annotated on the S&P chart posted below, I sniffed out what appears to be important timing which would ideally hit on 1/10/14 (+ or - a couple tds). However, based on timing noted in the previous blog post, I think a top could reasonably be expected anytime in the first few weeks of Jan 2014.

Even if we do get a top in this early Jan area, based on other analysis not shown, I still expect a retest of the top (higher, lower or double top) around 3/27/14 area.

Lastly, I think the pattern in the RUT looks particularly compelling as an expanding rising wedge. If so, it should be completely retraced when the market finally does roll over. It doesn't always happen, but these patterns frequently have a throw-over of the upper trendline when completing. The vertical blue lines are a potential target range (if a throw-over occurs) based on some price projections from prior swings in RUT.

Kim Rice 12/29/13

Stocks: Deconstructing the Geometry and Cycles

The Dow has moved slightly above the 16180 - 16200 range noted in previous post as an expression of the Fibonacci ratio, which would have been a fascinating place for a top. Rightly or wrongly, I'm still looking for an important top in stocks and we should be pretty much there now as shown on the charts below. Based on the analysis on the charts, I think it would take a weekly close over 16,400 to invalidate the current fib expansions/projections. You always have to allow a little slippage on projections, but anything much above 16,400 would be pushing it beyond a "little slippage" I think.

The long and medium term trendlines on DJIA and NQ are still holding, with last week's advance touching them again. Strong weekly closes over the trendlines would become troubling for the argument for a top here.

The cycles I was looking at for a low at the end of the year may be inverting. Guessing polarity in advance is always tricky and, of course, cycles typically will just stop working after a number of iterations. If the market does turn down in the next few days/weeks I have some indications for a CIT/Low around 1/30/14 area. My long-term cycle analysis is still projecting a new high, double-top or lower high in March 2014 (ideally around 3/26 or 3/27), after which pretty much all cycles are pointing down (if cycles work any more in the era of QE).

Of course sentiment remains at extremes, and now there are all sorts of technical divergences cropping up in things like RSIs, breadth and new high indicators, etc.

Kim Rice 12/21/13

DOW Closes at 16179.08, a Near Perfect Expression of Fibonacci

As posted here recently, a superb target for a potential major top on the DJIA would be 16,180 to 16,200. Today's high was 16,194 and the close was one point off of a perfect 16,180. Of course this is a highly speculative observation, which hasn't been mentioned by anyone else that I'm aware of. We'll find out soon enough if the markets react to it.

Kim Rice 12/19/13

Trendline Resistance for Stock Indicies

Some major indexes are up against long term trendline resistance while sentiment is pretty much as bullish as it gets. Both of these are occurring as some major timing symmetries are coming together this week (as shown on previous posts). Seems like as good a time as any for a rug pull. We'll see soon if enough if that happens or if the fed can power the markets through all the technical headwinds.

Kim Rice 12/10/13

Possible Timing for Top in Stocks around Dec 11 or 12, 2013

Time-wise, the stock market has rallied right into the late Nov projection with the Dow missing by 6 points a perfect expression of fibonacci on the top tick reading of 16174 (so far). 16180 to 16200 would be a quite fascinating place to put in a major top from a fibonacci/numerology perspective.

The NQ has moved more than enough to invalidate the 10 projection price confluence in the 3400 area. However, timing points on the NDX are somewhat different than the SPX and DJIA. There is a pretty impressive time confluence in NQ on 12/11 to 12/12/2013 (+/- a td or two) as shown on the chart below. I'm starting to think a peak in NQ in that timing window is likely. In the S&P and DOW, 12/11or12 area may be a retest or lower high, though they also could go to new highs because anything can and will happen in the markets.

After 12/12/13 my cycle work suggests hard down to late Dec or first few trading days of Jan. "IF" we get a low around 1/2/14 (+/- a few trading days), we may get another rally into around 3/26/14 for a last hurrah in NQ before all longer term cycles roll over. The timing for the last hurrah peak (should it occur) in SPX and DJIA is earlier Mar 2014, and I think it's 50/50 on whether these indicies make new highs or lower highs in Mar.

Keep in mind, time and price projections have not worked well in the era of perpetual QE, so DYODD.

Kim Rice 12/8/13