Friday, October 30, 2009

SPX and Dollar

Dollar index issued a weekly buy signal by closing above 76 this week. A multi-week rally in the Dollar has begun.

SPX has started it's descent into the 20-week cycle lows in mid-late Nov.

On of the comments i received was....

"You were clearly expecting a 9 month crest in March and it turned out to be a low".

My Reply

It's useless to deduce anything from the 9 month crests. It's the lows that tell you the story. 9 month cycle (40 week cycle) crests coincide with the 20 week cycle bottoms. So there's bound to be some kind of lows heading into the 20 week lows. And in a dontrending market, you are bound to get a lower low heading into the 20 week lows, which should not all be surspising to a cycle analyst. That's what happened in March. It was the 9 month crest and the 20 week lows.

Like i said, it's the 9 month lows which always tells you the story. I was expecting the 9 month lows into July-Aug 2009 to break the March lows, which did not happen. Instead we got a lower high in July 09, which was an indication that the trend had turned up.