SPX: a month ago, I posted that we would see lower lows in five weeks. We've had several lower closes, and are very close to breaking the Jan. 23 low. This projection was based on my phasing that the nominal 5W cycle was heading into the 4.5Y low and would therefore be left translated with a lower low (lower than Jan. 23). Since that post, I've concluded there may be one more nominal 5W cycle to go in the SPX for the 4.5Y bottom. If there is, it could be a doozy.
I have previously posted comparisons between the last 4.5Y low and this one. Here's another. On a ten year chart, compare the 1999-2000 price action with 2006-2007.
In January 2001, with the SPX in the 1300 to 1400 range, the Fed for the first time in four years began cutting interest rates in response to the collapse of the Internet Bubble, making five cuts in the first five months of 2001, and six more later that year. Those cuts did not prevent the 4.5Y cycle low from hitting the 800 level in late 02 early 03.
Flash forward to the end of 2007 as the next 4.5Y cycle is starting to end. The SPX is in the 1400 to 1500 range, the Fed for the first time in four years begins cutting interest rates in response to the collapse of the Sub-prime Debt Bubble, and makes five cuts in five months and promises more. Same script, different actors.
I have previously made the Hurst case as to how SPX 950 could be projected for the 4.5Y low. This would require a downward break of the 54M FLD, and we are very close to that now. The scary part is that, unlike 2001 when there were two years left in the 4.5Y cycle, my phasing of the current 4.5Y cycle is living on borrowed time (as airedale keeps reminding us!).
So if you wake up on April 1 (or thereabouts) and someone tells you the SPX is down 100 or more points, it may not be a joke.
AI
