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SP500 Kitchin Cycle Says Trouble Brewing

About to be flattened

Since March 2009 the SP500 is up 250%, so another 10% gain is just chump change, and chasing it may be a step too far!

The Kitchin cycle (purple loops) suggests trouble can be expected between May 2017 and June 2018, readtheticker.com suggests a minimum 20% correction is a sure thing during the next 18 months with the TRUMP'ster around. Why chase a 10% gain now? Best waiting for the expected market correction before increasing your exposure to real market risk. Makes sense no!

NOTE: The price chart below with our RTTHurstDPO indicator shows price is conforming to the 900 bar Kitchin cycle.

S&P500 Daily Chart with Kitchin Cycles

Ok maybe you don't get cycles or other chart reading tools, and you need a fundamental reason for such a market correction. Easy, how about rising inflation on the USA $66T of debt. A 1% inflation increase is $660BN loss in purchasing power. Higher interest rates normally follow higher inflation. The US inflation chart below is the chart to watch, nothing else matters. The FED will finally have its inflation problem.


Source: tradingeconomics.com

Investing Quote...

"The market is like a slowly revolving wheel: Whether the wheel will continue to revolve in the same direction, stand still or reverse depends upon the forces which come in contact with it hub and tread." ~ Richard D Wyckoff

"Because of the extreme challenge, one must commit full attention to it." Market speculation is "no different than trying to be a successful doctor or lawyer ... you simply must devote yourself full-time to the study of your craft." ~ Bernard Baruch

"Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas." ~ Nobel Laureate for Economics Paul Samuelson

"Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected." ~ George Soros

"The minute you get away from the fundamentals - whether it’s proper technique, work ethic, or mental preparation - the bottom can fall out of your game." ~ Basketball Legend Michael Jordan.

 

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