Breadth is sliding

Breadth is sliding again.

Charts are shown for the NYSE however the ASX is more of a mixed picture.

First the NYMO

NYSI

NYAD ema20

BPNYA

But......

The cumulative NYAD indicates, if true, that this will not be the last breadth divergence for this bull market.

The stragglers are coming in...

A couple of weeks ago the NYSE short term breadth indicators were showing some clear divergences but not so for the longer term. That has now changed with the BPNYA, NYSI and cumulative NYAD all indicating that the next down-move is imminent, as can be seen in the charts below.

(Note that these charts are a couple of days old but the divergences are still valid.)

The snapshot above shows a couple of the major planetary cycles that I keep track of. 

As you can see  the 11th of November marked the last of two important bullish aspects and these cycles will now start to wane. 

There are still other positives in the future however the negative aspects at Christmas time are notable so when the  waning positives are also considered we might be in for quite a dive...

Season's Greetings!

: )

XJO and XSO

Please refer to comments shown on the following two charts.

First the bullish case for the XSO index.

But then the bearish case when a comparison is made between teh XSO and XJO.

Given that so many cycles are turning bearish I'm inclined to think that the bearish case will prevail.

NYSE Breadth

It's been a long time between updates. I guess the market can do that sometimes.

The SPX continues it's perpetual motion bull market, with the cumulative NYAD still making higher highs.

The BPNYA is still pushing higher as well.

Other breadth indicators have been waning though.

The Russell 2000 has diverged for a couple of weeks now.

My favourite, the NYSI, has also printed a small divergence (which is often just as good as a larger scale indication).

Lastly the NYAD ema20, which looks the same as the NYMO at the moment, has continued it's neg divergence.

This indicator also correctly called the low back in mid August. I went long for one or two days before reversing to short again. Stupid mistake.

So... The odds of a drop are pretty good. How low and for how long is hard to call though. The astrology suggests a relatively deep low around Christmas time, but there could still be yet more divergence before a drop into that low, assuming that it does eventuate.

Thin Ice

The forecast for lower prices by the end of the year seems fairly straightforward but trying to figure out the intervening top has not been easy... for anyone!!

Nevertheless the last couple of weeks the market breadth has been hollowing out nicely and is showing up on the board no matter how you crunch the numbers.

Firstly the SPX. It's currently above the Keltner Channel and has some straightforward momentum divergence on a daily chart. (The momentum divergence in a monthly chart is immense fwiw!!)

The Nasdaq and Russell 2000 are both singing from the same songsheet for a change, and indicating a move down is in the works.

The Bullish Percent, NYMO and NYSI (my favourite) have all made some clear moves and are putting divergences in place.

The Australian XJO index is a strange cow at the moment. It has been weak relative to the SPX for 8 years but now with the end of an epic bull market in sight it is showing relative strength in terms of it's own summation index!

The Breadth

Time for a breadth update.

It's time for a sentiment update as well but the continued sky high readings mean that it has lost it's usefulness as a timing tool but not it's meaning.

So...

Firstly a bit of commentary on the XAO chart. At the high there was a nice 1:2 divergence. You don't always get them but it's good to see them working when they do show up. Then at the low a couple of days ago there was some relative strength showing up in the XSO.

Most bull markets are followed by a multi-week secondary rally. It could be 7-12 trading days or it could be more than that. In any case if the recent top was THE top then a multi-week rally might be in progress. If that is the case then 12 trading days from the low runs to about the 23rd of June... just a couple of days after the winter solstice.

Next the NYSE.

Small divergence on the NYMO

The Summation Index has a negative divergence also, if you really want to find it, however the uptrend in the indicator over the past month really needs to be read as bullish.

The cumulative NYAD tells only a bullish story...

The ema20 of the NYAD has a small negative divergence matching the NYMO chart, however the consistent readings above zero make the divergence signal very questionable.

The Bullish Percent crunches the numbers in a different way but tells the same story as the NYSI. Viz. there is divergence on the board but the lift over the past month is notable.

The ratio of the Russel 2000 to the SPX is the same story as above, although with a small short term negative divergence.

The Nasdaq also often leads and has the first signs of a significant divergence for the first time in a long time.

Sooo.....

The long awaited steep drop requires yet more waiting. 

The lifting of the breadth indicators over the last month really does tend to indicate that it's not going down yet, even if we already have good reason to expect much lower prices by the end of the year.

The Future

By the end of this year Saturn, Uranus and the Lunar Node will have fallen out of their current trine aspects, and the node will have hit square to Jupiter.

The trine between Saturn and Uranus still has another exact touch in November 2017 and will drop within orb for a time after that, however it does indicate that prices will be much lower by the end of the year.

By the end of 2018 everything is looking much more negative again... The Lunar Node will have left Leo and will be hitting a square with Uranus. On the positive side the node is still relatively high in its 18.6 year cycle but as you can see in the chart below there is a lot of hard aspects in play.

Mid 2019 is looking seriously negative.

The node will oppose both Saturn and Pluto, as well as make negative aspects with some minor planets.

By mid 2020 the worst aspects have passed and the Lunar Node has entered Gemini... Cause for a lift in the markets for roughly 18 months (all else being equal).

By the end of 2020 however the Node's transit through Gemini will likely be outweighed by the hard square aspects between Uranus, Saturn and Pluto, with the Node making a 135 to Saturn at the same time.

Food for thought... and be sure to pay attention BEFORE the time comes.

The Present

Have a look at the astro charts in the previous blog post below and then have a look at the current setup in the chart below. This is just epic!!!! The proverbial blind Freddy can see a page of blue but I'll list them out as well:

• Lunar Node is in Leo, at the top of the business cycle (bottom right of chart).
• Lunar node is part of a 3 way 'grand trine' with Saturn and Uranus.
• Mars is opposite to Saturn, but this puts it sextile to both Uranus and the Lunar Node.
• Jupiter is trine to the Sun which also puts it trine to Gemini (which is key for US markets)

This is just massive, and as good as we are going to see for the US market for a very very long time. It won't last of course so in the relatively near future when the positive cycles give way to the negative the implication is that markets are in for a massive fall...

GET READY : )

{I've also made some charts showing the major aspects for the next couple of years and will post them to the blog shortly. For the time being though this is worth chewing on.}

The Past

Here's a couple of astro charts for some past major highs and lows.

If you are completely new to this just note that blue is good (120, 60 deg) and red is bad (180, 135, 90, 45).

First up is the 3rd of September 1929 Dow bubble high. It's fairly non-descript and doesn't have many clues for a very major high. Perhaps Jupiter (positive) in Gemini passing over the 8 degree point (at bottom of chart) had a significant influence here.

Next the 1932 low. Again there isn't anything much that leaps of the page at you. Mars (negative) has taken the place of Jupiter in Gemini. But not much else is obvious.

The big thing that you can't see is what happened in between these two charts though. I've highlighted Saturn, Uranus and Jupiter because even though they aren't in aspect to each other at that point they spent the best part of 1930 and 1931 forming hard oppositions and squares to each other.

This is something that was known well in advance by competent astrologers and was part of the basis for Gann to forecast the 1930's bear market when he was writing Tunnel ten or fifteen years earlier.

Next up is the 1987 top. No annotation needed here... Look at all the blue!!

Then just a couple of months later at the bottom of the 1987 crash the sky looks like this:
(Note in particular the Lunar Node opposition to Mars and both of them square to Neptune)

 In more recent times we have the 2000 high. Lots of red lines going on here but note that the Lunar Node is in Leo, at the top of the 18.6 year business cycle.

Then the 2002 low. Again this is not a very intuitive chart. The stand out to me though is the Luner Node opposition to Pluto and also Saturn has only recently passed a conjunction/opposition to both.

At the 2007 high... A lot more blue going on.

 But a short time later in 2009 the blue is gone and there's just the big opposition between Saturn and Uranus left. This aspect was almost there in 2007 but Uranus brings 'sudden change', which the GFC did in spades.

Who to believe?

Looking only at the NYSE for this post.

Sentiment is curently indicative of a top when looking at NAAIM, $CPC and $CPCE.

However using breadth to try and narrow down the timing for a top is not working too well at the moment.

First the indicators which concur with the sentiment readings and argue for a top any time now:

 When I look at the charts above it all seems fairly clear cut and logical... we are presumably at or near a top right now.

But then you see the direct contradiction in  the following charts and the whole setup suddenly doesn't make sense:

New highs on the cumulative NYAD are one of the best indicators available for assuming that an uptrend will continue.

The last chart above is an ema20 of the NYAD and shows that the daily NYAD data has been printing consistently above zero, as you would expect. It also shows a slight negative divergence but it doesn't appear to be anything to get too excited about.

So what to do? 

IMO a top is somewhere close but the next pullback is likely going to be a good deal shallower than I had been expecting it to be.