The dominant Master Cycle 2

The Master Cycle2 (MC2) is the most dominant cycle that I currently have as it has been more accurate than the others.  It predicted the following Highs and Lows:

1. 07/07/11H
2. 07/21/11H
3. 08/10/11L
4. 08/22/11L
5. 09/12/11L
6. 09/18/11H
7. 10/03/11 major Low (+1).
8. Ever since the 10/4 Lows, it was looking for higher into 10/28 high (in trading days).

Please remember that the MC does not always predict Price magnitude and has its hot and cold moments as it may have some misses, but overall it has been pretty much in the markets.

So what is next?

For starters, today 10/31 should be a short term 1 day sharp pullback cycle Low. Of course there are other swing Highs and Lows in the nearby future, but today is the next solar 10/31 CIT date that I have and we are declining into it and as the solar CITs have a good 84-90% record of forecasting the next turning point, it is highly likely 10/31 should be a Low.

Review of the 10/4/11 Low

I keep getting questions if I think the flash crash Low is still out there. Interestingly,  many are still looking for a huge crash as bearish sentiment remains rampant.

Let's review where we are exactly.

10/3 Solar CIT was the 10/4 Low as expected http://timeandcycles.blogspot.com/2011/10/flash-crash-cycle-low-is-coming-soon.html

I was initially looking for a couple of days rally, but amazingly bearish sentiment remained strong, despite the powerful straight up rally. I posted  this privately: "Bearish sentiment remains extreme for the last 5 weeks, which suggests limited declines, like the 10/4 Low and sharp rally phases since."  

On this public blog in the comment section I posted this on 10/9-10: http://timeandcycles.blogspot.com/2011/10/monthly-spx-29-week-cycle-and-gold.html: "There was a 29 week/139 TD Cycle that bottomed on 10/4/11 Lows." and "There are just too many Bears around the October Crash Phobia month, which might delay any big declines this month."

I got further confirmation when I looked at the 75 week cycle as the more accurate 360  trading day cycle and saw it pinpointing the Low as the 10/4/11 major Low:

 The 75 week flash crash cycle = the 360 TD Cycle:
04/14/00L -358- 9/21/01L - 369- 3/12/03L -359 – 8/13/04L- 1078 (3X 360 =1080) – 11/21/08L-356-4/26/10H-364-10/4/11L,  11/21/08L + 720 (2 X 360) = 10/4/11 Low exact!

Other reasons for an 10/4/11 major Low was posted on the Raj T&C private Blog as well: 

10/4/11 Low was the Low for October 2011 as it was:
1. The 75 week/360 TD cycle was the 10/4/11 Low
2. The larger 22 week Cycle bottomed on the 10/4/11 Low: 9/2/09L -22 wks-2/5/10L-21wks-7/1/10L-21.5 wks-11/29/10L-22wks-5/02/11H-22wks-10/04/11 Low.
3. The 29 week cycle Low: 7/8/09L-2/5/10L-8/27/10L-3/16/11L-10/4/11 Low
4. The Master cycle Low was the 10/04/11 Major Low.
5. Squares from 4/26/10H + 23^2 = 10/07/11 was the 10/4/11 Low
6. The NDX 66 week Cycle (click on chart to enlarge) since 3/24/00 High, bottomed on the 8/9/11 major Low and saw a retest higher 10/04/11 Low.

Finally on 10/13 I posted the details on the flash crash cycle and mentioned:
http://timeandcycles.blogspot.com/2011/10/flash-crash-cycle-in-details.html 

"The 10/4 Low at 1074.77 SPX certainly qualifies and could have been the Flash Crash Low. Due to excessive bearishness, any crashes could be delayed in this October Crash Phobia Month."   "Please note, some of the 525 CD/75 week flash crash cycle Lows were major Panic Lows, like the 4/14/00 Low, 9/21/01 Panic Low and the 11/21/08 Banking crisis Low, although some were not all that "flashy", like the 3/12/03 Low and 8/13/04 Low, but still they were major Lows."

This 10/4/11 was not flashy, but it was certainly a Major Low.

The Flash Crash cycle in details

As promised I would post details of the Flash crash cycle.

The 5/6/10 mini Crash became known as the Flash Crash. I discovered this cycle last year when the Flash Crash occurred, which is why I named it the Flash crash cycle. This Cycle has been in the markets ever since the crash of 4/14/00 Low (click on chart to enlarge). 

 

04/14/00L – 09/21/01L =   525 CD = 75 weeks = 2.618 X 200 CD = 523.6

04/14/00L – 03/12/03L = 1062 CD = 2.02 X 525 CD = 03/12/03 Major Low

04/14/00L – 08/13/04L = 1582 CD = 3.01 X 525 CD = 08/13/04 Major Low

04/14/00L – 11/21/08L = 3143 CD = 5.99 X 525 CD = 11/21/08 Major Low

04/14/00L – 05/06/10L = 3674 CD = 7.00 X 525 CD = 05/06/10 flash Crash

04/14/00L – 10/14/11   = 4200 CD = 8.00 X 525 CD +/- 1 week

I had marked 10/14/11 since last year as the next flash crash cycle Low to watch.  

Please note, some of the 525 CD/75 week flash crash cycle Lows were major Panic Lows, like the 4/14/00 Low, 9/21/01 Panic Low and the 11/21/08 Banking crisis Low, although some were not all that "flashy", like the 3/12/03 Low and 8/13/04 Low, but still they were major Lows.

Comparable Crashes:

1. 10/20/87 Crash week had a   66.23 SP range, 23% decline

1. 04/14/00 Crash week had a 187.79 SP range, 12% decline

2. 09/21/01 Crash week had a 145.00 SP range, 13% decline

3. 10/10/08 Crash week had a 257.76 SP range, 23% decline

4. 05/07/10 Crash week had a 139.34 SP range, 12% decline

Here are some interesting statistics:

4/14/00 Crash week, 9/21/01 crash week and 5/6/10 Crash week all saw a 12% decline.

A 23% decline from the 5/2/11 yearly High, would target 1055 SPX.

A 12% decline from the 9/16 Highs, it would target 1070 SPX.

Also note that Cyan weekly channel support comes in at 1065 SPX area, which was the 5/6/10 Low and 8/13/04 major Lows, 2 previous flash crash cycle Lows. 

Price targets:

1060-70 SPX is the long term Monthly SPX  channel support from the 8/87 High.

Originally the bias was we decline into the 10/14 Low +/- 1 week, with a minimum 1055-60 SPX target.

The 10/4 Low at 1074.77 SPX certainly qualifies and could have been the Flash Crash Low.

Due to excessive bearishness, any crashes could be delayed in this October Crash Phobia Month.

On the other hand, the flash crash cycle could still be out there in the coming weeks ahead, but we would need fresh bearish news from Europe or elsewhere to stimulate it.

10/13 next short term High

We have been basically straight up since the 10/3-4 Solar CIT Low and have rallied 139 SP's so far into today's High

I have a 54/108 hourly Cycle (click on chart to enlarge) due tomorrow 10/13 that should be the next short term High

Short term Low? Monthly SPX, 29 week Cycle and Gold weekly support

Although larger trends are down, could we be at short term support? 

The Monthly SPX pierced long term red up channel support last week and touched Cyan support at the 10/4/11 Lows, but rallied back and closed above its red channel support, keeping the uptrend intact.

There was a 29 week/139 TD Cycle that bottomed on 10/4/11 Lows.

The Gold weekly chart is resting on weekly support.

The Master Cycle review

The Master Cycle (MC) 1st mentioned in the beginning of 2011, was looking for generally higher prices into June 2011. http://timeandcycles.blogspot.com/2011/02/master-cycle-2011-2012-crash-forecast.html

 

Result: We saw a May and July Major High.

The High of the year is confirmed in and we should be weaker in the 2nd Half of the year and lower into at least November 2011 when the next 35 week cycle Lows are due. We remain in the (Red) down channel.

Reminder: Open House starts this weekend

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The Flash Crash cycle remains on course, but the next Solar CIT was today

All the bearish sentiment has managed to do in the last 3 weeks was produce short sharp rallies, before we went to  lower Lows today.  

We remain on course for the Flash Crash cycle due in October, mentioned on this blog on 9/23/11 http://timeandcycles.blogspot.com/2011/09/flash-crash-cycle.html

However, we are at the next Solar CIT due today, 10/3+/-1 and we have declined into it, suggesting a Low is forming and a short term rally is due.

Solar Change in Trends (CIT) was discovered some years ago.  I keep track of them in my daily email. Over time, Solar CITs have an average 84-90% accuracy. 

In the last 3 months, since 7/7/11, 13 out of the last 13 Solar CIT were all direct “hits” +/-1 TD:   The 7/7 CIT was a 7/7 High. The 7/12 CIT was a 7/13 High. The 7/22 CIT was a 7/21 High. The 7/29 CIT was the 8/1 High. The 8/5 CIT was the 8/4H. The 8/11 CIT was an 8/10 Low near the close. The 8/18 CIT was the 8/17 High. The 8/24 CIT was the 8/25 High. The 8/30 CIT was the 8/31H. The 9/5 Solar CIT was the 9/6 Low. The 9/12 CIT was the 9/12 Low. The 9/19 CIT was the 9/20 High. The 9/26 CIT was the 9/27 High.

We have declined into the 10/3 +/-1 Solar CIT, suggesting a Low is forming, but we need to see a clear reversal tomorrow, otherwise we could see one of those rare 10% Solar CIT failures due to strong down market momentum.