The State of the Trend

By: George Krum | Sun, Nov 27, 2011
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You know that a market is in trouble, when it can't even muster a solid dead-cat bounce despite oversold market internals. Something we've been witnessing a lot lately with the SP500:

And if the recent past is any guide, there is a lot more selling to follow. This should come as no surprise as the European financial crisis continues to spin out of control.

S&P Weekly Chart
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From a weekly cycle perspective, however, there are still glimmers of hope. The composite weekly cycle is flatlining, since the longer-term cycles are still pointing up, while the shorter-term cycles are pointing down. If that doesn't change, the result should be a double bottom.* You can monitor these cycles yourself for any stock with the OddsTrader app:

Next weekly channel support is at 1145 and 1090.

In order to find a silver lining, one needs to dig deeper into longer-term, historical trends. Although the SP500 is lagging behind the pace of the 1994-2000 rally, it is still doing better than the 2002-2007 rally:

S&P Weekly Chart
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* See J. M. Hurst, The Profit Magic of Stock Transaction Timing, p. 57.



George Krum

Author: George Krum

George Krum

George Krum is the author of the "CIT Dates" blog, and the following apps:

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world, and to build long-term forecasts and models.

OT Pairs - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

OT Pivots - combines the power of pivot lines with cycles to provide you with concise technical analysis and powerful trading signals.

OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

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