rhight wrote:cougar wrote:rhight wrote:Hey cougar, I see your on. I have a few timing studies I'll post in a bit, looking out over the next two weeks. I'll study your charts and have comments. Presently short via SDS at 1185 SPX. Current stop is at 1170. Check you later, going for lunch. Including my Daily chart that shows a Negative Price Reversal on the RSI was confirmed on Thursday.
Hello "rhight"! Yes, nice reversal! I am looking forward to your further commentaries.
Here goes - 9/25/11 : According to "Technical Analysis" Kirkpatrick/Dahlquist, "For efficient use of trading capital, consider trading with flags and pennants . . . After a breakout in either direction . . . prices usually run immediately, having very few pullbacks or throwbacks and low rates of failure." Failure rates for flags are only about 10 - 20%.
With this premise in mind, and using the last week of Feb. and the first half of March 2008 as in interesting analog, a Fibonacci time analysis was performed using various Daily pivots. (SS images are included, refer to a SPX Daily - 6 Month chart to spot the pivots, one was uploaded earlier). It seems that as volatility has picked up, the frequency of the Daily cycle has increased. My statistical system samples the last twelve Daily waves, and when they go from elongated to compressed, it skews the average and the standard deviation balloons, making the probable time window for the next reversal too wide to be useful.
And so, I duplicated the SS, producing two versions, one with the longer waves projected, and the other with the shorter waves projected. The more recent, compressed Daily wave study additionally has two variations, one with 9/16 as the last swing high, and one with 9/20 as the last swing high. Note how the Histogram peaks are occurring early in the Time Band and Low-to-Low Cycle width overlap.
SPX 09-16-11 Time Projection Low.png
SPX 09-20-11 Time Projection Low.png
Each analysis produces three independent time targets; a Low to Low Cycle Width, a Time Band, and a Fib time cluster (drawn from 64 fib time calculations), the overlap of the three targets give a high probability time window (or so the theory goes, at times it IS uncannily accurate). Additionally, when the Time Bands and Low-to-Low Cycle Width for all three analyzes are overlapped, the result is 10/4 to 10/6. This corresponds well with a Fib time cluster on 10/5 (using the elongated Daily wave pattern). Note that the elongated wave cycle starts at the SPX 1370 high, and the describes a possible 5 wave down, possibly culminating in the next Daily cycle low, giving this next chart particular interest.
SPX 09-20-11 Time Projection Low Alt.png
A 5 wave down price projection with overlapping values at 1065.
SPX 09-12-11 Bear Price Projection.png
So putting it all together, the probabilities could suggest this possibility - a minor low early next week, a pull back into the end of the quarter, perhaps Thursday, followed by another leg down into the middle of next week. Possibly culminating at around 1065. After that, no idea, but perhaps a rebound for 4 to 6 weeks back up to the declining 200 DMA, and then another intermediate wave down. We'll see.