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Election Day

Good morning Traders,

As election day comes to a close, we'll have a better view of the power in the government over the next two years. I'm not a political person, but you have to monitor it as it can cause some shifts in investing strategies. Those shifts have the potential to impact the market which sits atop a precipice.

In today's article, we'll view our cycles and timing indicators. We're in the window for a reversal over the next two weeks. So the caution flag is raised.

First, we have our inverted version of our model that we published last year. As we get close to 2015, I'll start modeling next years market. But for this one, I extended it into 2015 because it shows such a significant year end move.

2014 SPY Forecast Model

Next, is our 10/20/40 cycles, which had us looking for an October low. Now we have a 10 week cycle high date coming in. Markets rarely follow these cycles rigidly, and the timing of actual bottoms to cycle bottoms can tell us a little about the state of the market. For example, the fact that this bottom was right justified (came in late) is bearish.

10/20/40 Week Cycles

Our 35 day trading cycle, which nailed the 8/5 bottom, is approaching an 11/12 date, looking like it's inverted.

35/105 Trading Days Cycle

Going to a stock market internal indicator, we have a potential top.

Advancing Volume minus Declining Volume

And finally, in this view of our stock market timing tool, we are approaching a top.

Stock Barometer

As we enter this window for a top, we'll likely issue our covered calls first, as we don't expect the markets to be able to make much headway over the next month. But that doesn't mean the markets will crash. One can only hope...

These indicators are all about timing. As we've been doing since 2000 and since we went on our own and started this site to help traders time the market - all our indicators are about knowing when to buy and when to sell. While the market is random, it can be predicted to a point. And we'll continue to give you our unbiased view, based on facts, not news or false narrative.

That being said, the election is a timing component that can play into the markets. When we see such a convergence of indicators with a 'news' event, the potential for a shift in the markets is huge. So stay tuned...

Regards,

 

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