Last year, the markets experienced an inexplicable transference of amplitude from the 20-week cycle down (anticipated December 2004) to the next 5-week cycle down in January 2005.
An almost identical pattern is occurring this year--with a twist. Instead of selling off right after the New Year, the market has launched, creating the ultimate bull trap. This is not to say it isn't a tradeable rally--of course it is. But the bullish mood is custom designed to suck in the unsuspecting public one more time.
So when will we see the full force of the 80-week low (even if associated with a 5-week or 10-week low)? It could start any day, but as late as next 10-week cycle down. The reason may *appear* to be some world event associated with Israel, Iran, North Korea, the inversion of the yield curve, or perhaps simple profit taking. When the decline begins, don't be fooled by the commentaries or the major events that appear to trigger it. It was in the cards all along.
Oh, how the market does like to fool and surprise.
Last year's pattern compared to this year's is worthy of study. Nearly identical in the runup, pause, runup pattern with a delayed cycle low. What is it about New Year's?
Any serious study of the FOMC activities charts on BullandBearWise.com reveals that major spikes have nearly always occurred during market declines, at cycle lows, or just after cycle launches. This has happened far too frequently to be mere coincidence, and clearly suggests that the Fed *is* interested in managing the market. The difference this last time is that there was no major decline, no significant evidence of a cycle low, but the Fed turned on the power to the maximum on the same day the FOMC minutes were released--after a significant ramp up in December. Interesting. This is not a conspiracy theory when the evidence is explicit. I'm *not* saying the evidence is conclusive, however. I simply do not know enough to say one way or another.
BB
AI
