Thursday, June 20, 2013

Review & Forecast: July Crash?

From last week's 6/14 Email: "The active Master Cycle (MC) suggests a 6/13 major Low and rally to 6/17 Highs. We should then see a volatile chop into 6/20L”

Actual: We made a 6/13 Low and rallied to a 6/18 High of the week and declined sharply into 6/20 Lower Lows.

From the 6/18 evening email and 6/19 Fed day early morning update:
“I have  several reasons to believe we may be at a short term High today, including the bearish rising wedge and the pattern of Fed Highs in 2013 and see a brief, possibly sharp, pullback into 6/20 Lows.”

The last 3 FED meetings in 2013 were all short term Highs (yellow vertical lines in the hourly chart): 

1. 2/20 Fed announcement => 2/19/13 High
2. 4/10 Fed announcement => 4/11/13 High
3. 5/22 Fed announcement => 5/22/13 High
4. 6/19 Fed announcement => 6/18/13 High

Actual:  We made a 6/18 Fed High, 6/19 went sideways until 2.00 pm High of day and saw a sharp decline into 6/20 Lows. The pattern of Fed Highs in 2013 and the rising bearish wedge were among the reasons we called for a 6/19 Fed High and a sharp decline afterwards, although today's Lows wasn't expected to take out the projected 6/6 and 6/13 major Lows,  so the last blog post suggesting that 6/13 was a major Low, was incorrect, 6/13 was a Low, but not the Low. I was expecting one last Higher High above the 5/22/13 Highs, before the actual decline began, but as the 6/6 and 6/13 Lows have now been violated, it suggests that the more bearish Scenarios are already in play and the coming MC High could be a lower High.

What’s next: We should decline into the 6/20-21 Master Cycle Low right at the 6/21 Solar and geometric double Time CIT and see a sharp rally afterwards.  As mentioned before, I have 2 Medium Term Time CITs (which is rare) due in July 2013 that bears watching. There is one cycle that suggests a potential Crash or sharp decline in July 2013, but let’s see what kind of Highs we get first.


Raj Time and Cycles said...

Today's Lows wasn't expected to take out the projected 6/6 and 6/13 major Lows, so the last blog post suggesting that 6/13 was a major Low, was simply incorrect.

Marketguy said...

I think it may be even close Raj. I know this may sound a little outlandish but we could be looking at a flash crash ala a Black Monday type of scenario on Monday (not to the extent of ’87 but maybe 5-8+%). I base this primarily on the absolute throttling of the credit mkts this week (especially the municipal mkts up and to including today as well as the high yield mkt undercutting the Nov lows today). In addition there’s been an accumulation of VIX calls (July opex) in the 40 to even 60 range this week. Would be nice to see a pop first for the next leg down but I have a feeling fear will build over the weekend and we’ll see a significant downdraft in futures Sunday night and a waterfall on the open. Yes it’s a stretch but a possibility from what I’m seeing (and feeling). GL all.

dc-BEAR said...

no waterfall...yet. no sharp rally...yet. nothing is as it seems...but from what I've seen, we should have a little more fall, a little more churn, then a nice rally by thursday. After that...well, only the Lord knows for sure, but there's a good chance uncle Ben will not be getting the same rock-star treatment in the coming weeks...

best to your trades!

MP said...

I will be watching this July Crash... Thanks Raj.

Silverlady said...

anyone knows what date is this july crash? thanks


Silverlady said...

anyone knows what date is this July Crash? thanks


dc-BEAR said...

Be wary friends... we are on the verge of 'going ugly early' as this change in trend picks up momentum.... in my humble view, patience and prudence will pay off by mid-month for those that keep the faith...

of course, only the Lord knows for sure...always in motion the future be wary as the Street tries to confuse and blind you with QE greed in the coming days.

best to your trades!