I was rather intrigued at the chart below, published over on John McClellan’s site. I can practically hear the snare drum in the background as we approach autumn.
This “amateur cyclist’s” chart (I am anything but a cycles analyst) of the S&P 500 shows that the 12 month marker (C12) meant exactly nothing as the market remained firmly on trend, after brief pokes down in April and May. We noted that C12 was a lesser indicator than the 30 month cycle, which has coincided with some pretty significant changes (+/- a few months). That cycle (C30) is coming due at the end of the summer. Will it mean anything? Well, this market eats top callers for breakfast, lunch, dinner and midnight snacks. But it is worth knowing about to a lucid and well-armed market participant.
Well, oil’s explosive rally recently has been a thorn in my side (although the NASDAQ’s weakness has helped balance it out). I wanted to take a look at recently counter-trend rallies in oil and see if there might be any insights to be drawn. I have one……….
It seems to me, looking at recent history, that these idiotic, wrong-headed rallies last for thirteen days before reversing. Now I realize a sample set of two isn’t exactly mind-blowing, but what else ya gonna do? Just take a wild guess? Thus, if this pattern holds, oil has the rest of this week to keep pushing higher before it finally rolls over yet again.
One thing to note about the chart above……it does NOT include today’s action (which is another big up bar). I love SlopeCharts, but one limitation is that futures data is end-of-day only at this point, so I wanted to be really clear that one “day” is not present in what you see above.
That behind us, I was fooling around with Stockcharts.com’s cycles tool and came up with this monthly view of the S&P 500, with the thick black lines being a 30 month cycle and the thin green lines being a 12 month cycle, each starting from the 2000 market top.
Each cycle has caught some pretty significant turning points with the 30 mo. having caught the 2000 and 2007 tops along with the 2002 bottom and the pre-corrective 2015 top. The 12 mo. cycle seems to have been more adept at spotting interim turning points but it did catch the 2009 bottom.
So as I’m sure everyone noticed, price sped up a bit this past week. It might have taken some of us (including myself) by surprise, but in the bigger picture, ever since Nov 9th kicked this rally into full gear, price has been fairly relentless ever since. Just take a look at the 100MA deviation envelopes.
The day after the Trump election victory, articles came out on describing how much Buffett made – some $11B, according to this CNBC article published on November 22, 2016.
Thought that was a lot and that it might’ve been too late to buy then?
Well, wait til you hear about how much Buffett made after this past week’s rally. Just look at the size of that December rally compared with the election rally in November in the chart below.