LunaticTrader

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Posts Tagged ‘LT wave’

LT wave for February 2019

Posted by Danny on February 1, 2019

The LT wave did a mediocre job in January. Expected weakness in the first trading days of the year panned out OK. But after that the wave gave us a difficult read. The market burst higher into the first expected peak on the 8th, but didn’t really stop there. There was some sideways crosscurrents type trading in the 3rd week, but the market ended right at its highs, producing the best January gains in over 30 years.

Here is how the LT wave continues into February:

ltwavefeb2019

A weak period ends around the 3rd, followed by strength until the 8th. Then a weak period until the 16th, and stronger again until the 24th. The waves are a bit clearer defined then they were in January, so we will see.
There is a noticeable peak value on the 6th and another one around the 19th. Lowest LT wave values on the 1st and the 13th.

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LT wave for January 2019

Posted by Danny on January 2, 2019

Our LT wave had a good month. Expected strength in the first week did not pan out and hardly kept the market up, leading into the expected weak period which took the market significantly lower. The rebound in the final week came right on target. This is the LT wave for January:

ltwaveJan2019

The month is projected to start with a weak period until the 5th. And after that we enter a period of cross-currents which are difficult to read because the quicker blue line starts moving countercyclical to the slower yellow smoothed average line. Normally they move more or less in tandem, but that’s not the case this month.

What will take priority? I don’t know. Maybe it will be a sideways month, with the market looking for its next major direction, testing both the upside and the downside alternatively. Going on the blue line we see projected peaks on the 8th and the 27th. Bottom values come on the 5th, the 16th and the 30th. I am curious what will come of it.

Posted in Market Commentary | Tagged: | 1 Comment »

LT wave for December

Posted by Danny on December 3, 2018

The LT wave was close to perfect for November. S&P 500 peaked on the 8th and bottomed on the 23rd, very close to the high and low indicated in the LT wave chart.
For December the wave projects a very similar pattern:

ltwaveDec2018

Strength in the first week (with a peak value on the 6th) is again followed by mid-month weakness that ends at an important low on the 21st. The final week of the year shows stronger again, but that will probably come in thin holiday trading so I wouldn’t bet the bank on it.
Don’t get carried away by LT wave doing very well for a month or two. There will always be months when it is doing a lukewarm job, if not worse.
Good luck.

Posted in Market Commentary | Tagged: | 15 Comments »

LT wave for November

Posted by Danny on November 1, 2018

The LT for October did a mixed job. The expected strong period in the second week did not pan out at all and the market just went into a steady decline. The projected weakness in the second half of the month was obviously correct. For November the expected pattern looks like this:

ltwaveNov2018

A positive bias is expected to continue until around the 11th with a noticeable peak value on the 9th. Then there is a weaker period until the 26th followed by more positive values in the final days of the month.

Posted in Market Commentary | Tagged: | 3 Comments »

LT wave for October

Posted by Danny on October 6, 2018

A few days later than normal, but here is the LT wave chart for October.

ltwaveOct2018

The wave did ok for September with the cycle gradually coming back to normal.
Expected weakness in the first week did happen and was followed by a stronger period. The strong period did last a bit longer than projected.

For October we see the weak period stretching until the 5th. The market has dropped indeed. Next week a stronger period is projected, but whether this will take stocks back up to the recent highs is a big question. I think not, but we will see. The second half of October is also weak, so I would be very careful.

Good luck.

Posted in Market Commentary | Tagged: | 1 Comment »

LT wave for September

Posted by Danny on September 3, 2018

LT wave had another poor month in August.

The market moved almost completely opposite to the expected pattern throughout the month. Whether that will continue or not is impossible to say. All we can do is be extra cautious and wait for normal situation to return.
Here is the LT wave chart for September:

ltwaveSep2018

Weakness is expected to continue until Sep 7th. Since this weak period started on August 18 and has seen only rising prices, we could see a sudden late pullback or a simple continuation of those rising prices. There is no way to tell. A strong period is then projected until the 14th. If no pullback is seen before the 7th then we could get a market top in this strong period.
The final weeks of the month look weak again.

Good luck.

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LT wave for August

Posted by Danny on August 2, 2018

Our LT wave had a mediocre month in July.

Expected weakness until the 10th did not pan out, with the market breaking out to the upside on the 6th already. Expected strong period until the 22nd did work out but extended well beyond that date with S&P 500 peaking on the 25th before projected weakness started kicking in. Not a terrible month, but the timing was off by several days.

Here is the LT wave chart for August:

ltwaveAug2018

The wave projects ongoing weakness until around the 7th followed by a stronger period until the 17th. The second half of August is expected to be weaker again. The patter is quite similar to the LT wave for July.
Highest daily value comes on the 12th, with lowest values on the 5th and 20th. If the mid-month strong period does not produces a new high (> July high) then the subsequent weak period could be more damaging than the LT wave suggests. Weak periods have mainly given us sideways action in the recent month. That would probably change if we get a lower high and more bearish sentiment.

Good luck.

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LT wave for July

Posted by Danny on July 3, 2018

Markets have been sputtering in recent months, but long term up trends stay intact. The Nasdaq has already climbed to new all time highs and is closing in on the 8000 mark.

Here is the current chart:

^COMP (Daily) 9_12_2016 - 7_2_2018

As long as the trend line is not broken it is too early to declare a top in this market. The Earl indicator (blue line) is turning back up after the recent week’s pullback. This suggests a new upswing could be starting. But the slower Earl2 (orange line) is still going down, which means new highs may have to wait at least a little bit. The MoM indicator is also trying to paint a bottom, so the setup suggests a rally attempt in the next few weeks.

Our LT wave did a reasonable job in June. Suggested weakness in the first week did not pan out, but the month’s high came very close to the 14th and the final weeks were weak again, as expected. Here is the LT wave for July:

ltwaveJul2018

The projected pattern is quite similar to last month. Expected weakness until around the 10th, followed by a stronger week and renewed weakness after the 22nd.
Lowest LT wave values come on the 9th and the 30th. The highest value is expected on the 17th.

Good luck.

Posted in Market Commentary | Tagged: , | 5 Comments »

LT wave for June

Posted by Danny on June 1, 2018

US stock markets are trading in a large sideways pattern since February. But lunar cycles keep doing well in this environment.

The LT wave did a good job in May. Lows of the month came in the first week as expected and a stronger period followed. Projected weakness in the final days of May came right on target. It doesn’t get much better.
Here is the LT wave for June:

ltwaveJun2018

June is projected to start with weakness until the 11th with lowest LT wave value coming on 11th. Then we should see a stronger period until the 22nd. The highest LT wave value comes on the 14th. The final week of June is considerably weaker again.

In this type chart we pay most attention to the general direction bias, not so much the absolute levels. For example on June 14th the LT wave peaks above the LT wave highs of May, but that doesn’t mean the market will be higher. If stocks decline considerably in the weak period until the 11th then I would expect only a rebound that stops short of the May highs. If on the other hand the market holds up very well until June 11th then there is a very good chance stocks will break out above the May highs in the subsequent strong period.

Then there are always months when the expected pattern doesn’t show up at all. So, use the LT wave with a healthy skepticism. Last month’s result doesn’t guarantee anything for the next month.

Posted in Market Commentary | Tagged: | 7 Comments »

LT wave for May

Posted by Danny on May 1, 2018

Stocks have largely gone sideways in the recent month. It remains unclear whether the next major move will be up or down.
Here is the current S&P 500 chart:

^SP500 (Daily) 6_30_2016 - 4_30_2018

Technically the Earl (blue line) peaked out in mid April and has come down to the neutral line. No signs of a bottom.
The slower Earl2 is still climbing, but appears to be flattening out near the neutral line. And the MoM indicator is also in the neutral zone. None of this offers us any clues about the next move, so all we can do is wait.

It’s time for our LT wave for May:

ltwaveMay2018

The wave did pretty well in April. Expected weakness until the 12th saw the index hover near support just below 2600. The more positive bias for the remainder of April saw the market test the 2700 levels as we expected. Volatility did clearly drop, so that was a good call too.
For May the wave projects another weak period until around the 11th. This is to be followed by a strong period until the 28th. The final days of May show weak again.

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