A Look at US Markets - SPX

Been promising for a while that I will post my analysis and phasing on the US markets. So here it is - I have presented SPX here instead of DOW - I somehow have been following that index for a long time rather than DOW or NASDAQ.

Anyhow here is first a very long term look. Its a monthly chart.



You can see the longer term cycles here - First 9 year nest of lows shown here is in April of 1994. Next 9 year nest in March 2003. And now the next 9 year nest of lows sometime toward Dec end of this year? There is always a chance it can come a little bit later. Jan or Feb? This being such an important low chances are there it will extend.

Now I have been mentioning for a while that our Indian market lows will likely come in November 1st week because we have been leading the US market by few weeks. I think by around 7.5 weeks or so. This will also be similar to Oct end 2008/Mar 9th 2009 lows where we bottomed ahead of the US markets. But looks like the gap has reduced considerably right now :)

Anyhow now a look at the shorter timeframe.



The last 18 month nest of lows came in June end. And the last 40 week low came in March mid timeframe. And the last 20 week low came on August 9th. Right now we are in the last 20 week cycle within this 80 week cycle and also with the 4.5 and 9 year cycles. Timeframe for the projected 9 year nest of lows shows as around the last week of Dec. But it may extend also. Will see as we get closer.

A bit more of a closer look.



Monday 12th Sept likely made the first 5th week low within this last 20 week cycle and we had a good rally out of it. This is also the same timeframe that the Indian markets made the 2.5 week low. So we are just 1 week out of the 5 week low in SPX. So still quite early but likely we are closer to a top in both this 5week cycle and possibly the 10 week and 20 week cycles.

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An update on the Indian market -

As mentioned before, we got the first 2.5 week cycle low last week Monday/Tuesday in this last 10 week cycle before a major low which expected in November mid timeframe. This 2.5 week cycle has run around 1 week now so we are in the topping region. And likely it will also be the top for this 5 week and 10 week cycles. The only question is - Have we topped already?

I think its a very high probability that we might have. If we havent then we might have one more push higher into the 5150-5180 range. As I mentioned before stops for shorts have to be somewhere in the 5200 area. If we push above it, have to accept its going much higher. But for now, lets go with the assumption that we have topped or are going to this week.

This week and the next has the potential to become very bad very quickly - the way I see it. But still lets go with levels. First 5000 has to break for the bearish case. Then the 2.5 week lows has to break next at around 4900. If both of these are done, then we can safely assume that this thing is cooked and we will soon go below the 4750 lows as well. But take a deep breath..and lets go one step at a time.

Friday was quite a whipsaw day..Got whipped a bit on my positions but still held on to most of the shorts I had with some exits and re-entries. Might reduce some today if there is some weakness just to reduce basis costs. I think I already mentioned that I have been scaling into 4700 NOV PUTS. Still have been doing that little by little. NF shorts have been trying to trade in them to reduce basis cost...Will continue to do the same intraday as long as we remain in this range.

Best,
Lee