• 10 hours Why Chinese Rare Earth Prices Are Soaring
  • 1 day 2021 Could Be A Huge Year For Chinese Stocks
  • 2 days Shadowy Brokers Target Easy TikTok Money In New Scheme
  • 3 days Cannabis Sales Are Soaring In The United States
  • 4 days Biden Will Be A Boon For Solar Stocks
  • 5 days The Shroom Boom Is Here To Stay
  • 8 days The Gold Rally Has Finally Run Out Of Steam
  • 8 days Citibank Analyst Predicts $300k Bitcoin By End Of 2021
  • 11 days Bitcoin Lives Up To Its Safe Haven Status In A Big Way
  • 11 days 14 Million People Will Lose Unemployment Benefits On December 31st
  • 13 days Why 12 Million American Millionaires Isn’t Good News
  • 14 days Big Oil Is Paying The Price For Investing In Renewables
  • 15 days The Banking Industry’s $35 Billion Gravy Train Could Disappear
  • 16 days Did Amazon Just Democratize Prescription Drugs?
  • 18 days The Private Space Race Just Got Very Real
  • 19 days Short Sellers Are Willing Big In This Turbulent Market
  • 21 days SpaceX Gets Go-Ahead To Send Humans Into Space
  • 21 days Saudi Arabia Lost $27 Billion In Oil Crash
  • 22 days China’s Big Tech Takes A Hit As Regulators Crack Down
  • 23 days Black Friday Could Be Retailers’ Only Hope
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

The State of the Trend

The SP500 yearly trend remains up since the index made a higher high and a higher low in 2015. The monthly and the weekly trends are flat, but the daily trend is up since the SPX made a higher high and a higher low in December '15. Despite the selloff during the last hours of the last trading day of the year, price is still above the 50% retracement of the last upswing, meaning that it remains in a strong position:

SPX Daily Chart

Market breadth, however, has been steadily declining during the second half of 2015 and is negatively diverging from price. Until this divergence gets resolved one must remain very vigilant:

Market Breadth

Looking at the bigger picture, and using 2016 as an anchor, this is what we can expect in the upcoming year.

The 4 year (Presidential) cycle is mostly bullish. There have been 10 bearish years and 22 bullish. The average gain for the bullish years is 16%, and theaverage decline for the bearish years is -13%

Year 6 in the Decennial cycle also has a mixed track record.

Year 6 in the Decennial Pattern

Five out of 13 were negative years, seven were positive, and one was break even. Four of the seven positive years occurred in the last 40 years. Looking at the graph, one can make a case for a pretty regular bullish/bearish 40 yearcycle, except that 1936 gets in the way.

According to W.D. Gann, year 6 is a bull year in which the bull campaign which started in the fourth year ends in the fall. That's mostly true,assuming it pertains to year 16 in the 20 year cycle (see below).

Looking at the 7 year cycle, the results are split evenly between bullish and bearish years. The nine bullish years produced an average gain of 20.4%,while the bearish years had an average 13% decline.

Year 16 in the 20 year cycle is mostly bullish:

20-Year Cycle

The 30 year cycle is mostly flat (with the exception of 1986).

The 40 year cycle is strongly bullish (with the exception of 1896).

The 42 year cycle is very bearish, with an average decline of 21%.

The 49 year cycle is mixed: two bullish outcomes and one bearish.

The 60 year cycle is flat.

And the 100 year cycle is flat, although the 50 year cycle is bullish.

In summary, the cycle outlook for 2016 is very mixed. There are certain calendar and seasonal periods that stand out, but we'll discuss those in due time. As usual, we'll continue keeping track of the trend, along with market breadth and momentum studies and analytics, and will do our best to keep youon the right side of the market.

 

Back to homepage

Leave a comment

Leave a comment