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Morning Brief* – April 28, 2014

Morning Market Brief.

Macro economy in terms of business cycle model-

4/15- News trend of last week and this week is best summarized as long term positive, but China remains a concern of slower paced growth.


Markets in terms of business cycle model:


L5-L13 trends durations are hours to fraction of one second.

L4 trend duration is ½ to 2 days. Intra-week trend. A very short term trend.

L3 trend duration is 2 days to 2 weeks. Intra-month trend. A short term trend.

L2 trend duration is 1 to 2 months. Minor intermediate intra-year trend.

L1 trend duration is 1 to 5 months. Major intermediate intra-year trend.

3yr cycle trend duration is 5 to 27 months. Minor long term trend. Intra-decade trend. Can make or break your business and investment year. But can be choppy at times. May relate to famous Kitchin cycle used in business and economic analysis.

9yr cycle trends last a few years to nearly a decade. Major long term cycle. Intra decade to decade. Economy follows this cycle with growth trends of 7 to 12 years and recession trends of 1 to 3 years. This cycle is found in weather/climate, production, consumption, prices. Similar to same cycle as the Juglar cycle used by business and economy analysts.

Super cycles- 27/36, 54/72, and 216 years. Create trends lasting a decade to a century.

See end of document for favorite technical studies.

All trends integrate for the big picture- for a clock like model. Consider people conduct business on a basis of daily, weekly, monthly, quarterly/semi annual. Relative society, monetary, multi-generation, plus business, people create trends on a basis of decade, century, etc. The second hand of a clock times the minute hand that times the hour hand.

Managed Alternative Investment-4/4- My fund, CWL, posted a new record high for March. CTAs have underperformed as a group for three years. Hedge funds out performed CTAs, but under performed the stock market.

Commodities –(mostly based on DJUBS index)–4/25- L2 top as expected week of 3/3. L1 bottom week of 3/24. Trend is up into L1 top due early May. Some commodities however can peak in April. L1 bottom due during May raises risk of a correction during May. But what of long term trend relative long term bullish macro economy cycles.

Stocks – L3 trend(next 5 days)-4/25-L3 trend peaked with cycle window of reversal. 4/24/14. Trend is down until some time next week with potential for as low as 1837 SP500, but not likely to be that low. Watch response to 40d avg near 1867 and the 50d avg. L1/L2 trend(next 2 months)-4/25- L1 cycle up trend into May, likely late May and with potential for minor new record high for SP500. But I wonder of odds for range trade now and well into summer months. Another intermediate trend decline is due in June, and as of yet, I can not decide whether it will be a minor set back or large.

Euro Forex –L1/L2 trend(next 2 months)-4/25-L1 top week of 3/14 and related bottom week of 4/4. Current up trend is L2 type. If larger L1 trend is up then this market can be well supported into summer months, but currently favor the L1 top to hold as resistance and so not expecting current L2 trend to create a new high for the year. It may be a struggle but this market can test the current high of the year. Should at least rally to 1.3883.

Yen Forex –L1/L2 trend(next 2 months)-4/25- L1 top week of 12/30. L2 top week of 4/4 -a revision. Trend is down into L1 bottom due week of 4/28 to 5/5. Range bound?

Gold – L1/L2 trend(next 2 months)-4/25- Should rally from a late L2 bottom. Should rally or at least be well supported into summer months. Still long term bullish but see no reason for a major bull market. May stall for large amount of time, from time to time. Violation of this week's low could mean a stall out period of time. Bullish opportunities allow for 1470s this year, but again, it may be a struggle at times.

Additional model input-

Core model is cyclical price only. Total model research includes conditions from quantitative, fundamental, and economic studies as well as simple observation (discretion opinion), plus cycle model concept applied to a variety of fundamental/economic data including PMI, nominal GDP per capita, various supply/demand data, and climate. The core model and the use of the concept applied to non price data is called Cycle Series Analysis.

Twitter: @cycleszeitgeist YouTube: Richard Posson Stocktwits: cycleszeitgeist rposson

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Alternative investment managed by Richard Posson.

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