Tuesday, June 14, 2011

The Intermediate Stock Cycle

An intermediate stock cycle trough will serve up the best entry an exit points for equities. Historically the intermediate cycle is measured in weeks and will have a bull or positive skew of about 12 weeks and a bear or negative skew of about 8 weeks. This gives us – on average – a trough to trough measurement of about 20 +/- weeks. In a bull market (like this one) the bull skew will be longer in duration than the bear skew and in a bear market (such as 2007 – 2008) the bear skew will be longer than the bull skew.

The last complete intermediate cycle peaked on May 7, 2010 and troughed 12-weeks latter on July 23, 2010.

The Japan earthquake of March 11 2011 has interrupted the current intermediate cycle correction in the commodity sensitive sectors - (metals & mining, materials and energy) that began in January 2011.  The "Japan Event" triggered a 6-week rally from March 18 to April 22 and has delayed our anticipated cycle low of early May 2011 until mid June 2011


Piazzi said...


just thought FCG was more gassy

BTW, I am sure you have noticed the way gold and XRB (or TIP for that matter) move together graphically

It's been fascinating me since 2009's low

Anonymous said...


Any thoughts on RIM?

Gettingtechnical.com said...


No doub't a value trap that we all now hate (the business media tell us so) and so the worst may be over I also see big support at the 2004-2005 levels at $26.50 RIM needs to do some work in here

Bill C

Gettingtechnical.com said...

Hi Piazzi

Yes there is some correlation it seems they are "risk-off" trades but we do need the US 10-yr T-Bond yield over 3% to get the equity markets going

Bill C

Anonymous said...

Hi Bill,
So you think it's the ideal time to invest? I've been very conservative and have money on the sidelines since Feb, I now think to go in, what do you think about a simple allocation (equity portion) of 20% each of XEG.TO, XMA.TO, XFN.TO, XSP.TO, CWO.TO.
Any other suggestions