Erik McCurdy's  Instablog

Erik McCurdy
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Erik is the senior market technician for Prometheus Market Insight and has been performing chart analysis since 1995. The software program that he developed to monitor long-term stock market trends has correctly identified 92% of the cyclical turning points in the S&P 500 index since 1940. His... More
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Prometheus Market Insight
  • Stock Market Annual Cycle Undergoes Important Test 0 comments
    Dec 2, 2012 6:33 PM | about stocks: SPY, DIA, QQQ

    In late 1999, our Secular Trend Score (NYSEMKT:STS), which analyzes a large basket of fundamental, internal, technical and sentiment data, issued a secular trend sell signal for the stock market. At the time, our computer models predicted that stocks would enter a secular bear market that would last from 10 to 20 years. Following the topping process in 2000, a prototypical secular bear market began and it continues today.



    (click to enlarge)

    The latest cyclical bull market from early 2009 has a current duration of 45 months. When they occur during secular bear markets, cyclical uptrends have an average duration of 33 months, so the formation of the latest long-term cycle high (LTCH) is overdue and it could occur at any time.



    (click to enlarge)

    Long-term tops nearly always form in conjunction with an annual cycle translation change, so it will be important to monitor the development of each annual cycle closely until the overdue LTCH is in place.



    (click to enlarge)

    We are six months into the annual cycle from June and a meaningful signal could occur as soon as December. Therefore, it will be important to monitor market behavior closely during the next two months for this potentially significant development with respect to long-term direction.

    We will identify the key developments as they occur in our daily market forecasts and signal notifications available to subscribers.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: SPY, DIA, QQQ
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