We concur with Paul Simon of Tactical Allocation Group, the mild sell off in stocks in May 2011 will continue and it may accelerate into June. He confirms the cyclical stocks have already rolled over, however we must add that we have a powerful dominant cycle within the Morgan Stanley Cyclical index of 175 weekly periods that holds 100% success rate, we for one will not argue with it.
Paul Simon at Yahoo Ticker Breakout Show: 20110527
Cyclical stocks are the most sensitive to react to bullish and bearish market news, they tend to move faster in either direction, for this reason cyclical stocks are market leaders as fear and greed are alive an well in this sector.
If will take a powerful force (QE3 maybe) to keep the MS Cyclical Index in either a rally or sideways mode, but we believe good old market fear will translate into a 10-20% sell off shortly. Our last few post, have been bearish, sorry folks it is what it is. We watch cycles, wait for confirmation, then act. No confirmation no action. Watch this space, be a winner get a chicken dinner (ha)!
MS Cyclical Cycle Chart