The State of the Trend

By: George Krum | Sun, Jan 6, 2013
Print Email

Despite all the hoopla surrounding the 12th hour fiscal cliff negotiations, the markets did what they always do: swinging from overbought to oversold and back to overbought condition. As the chart below shows, market internals became oversold on December 28th and are nearing overbought levels once again:

In our last article for 2012 we surmised that as long as the SPX stays above 1390-1400, the index will most likely embark on a more sustainable trend, similar to that of December '11 - March '12, or June - September '12:

Well, the jury is still out as price is within both channels, but with mounting overhead resistance and ovebought market internals, it seems more likely that the index will continue following the 2012 channel. As long as price remains within that channel and manages to break above the 1470-1475 zone, the next immediate target level becomes 1500.

We've mentioned the OT Seasonal app several times in the past, and for those who follow seasonal analysis, cycles, and in particular the decennial cycle, here's a heads-up: if you look at the decennial cycle for years ending in 3, you'll notice that during the last 120 years of DJIA history, there have been six bullish and six bearish years. Therefore, in addition to the composite cycle it would make sense to keep an eye on the bullish and bearish year cycles, which may provide a more accurate picture of what's in store in 2013:



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.

Copyright © 2011-2017 George Krum

All Images, XHTML Renderings, and Source Code Copyright ©