Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Monday, October 13, 2014

Wall Street Reining In Its 7-Year Cycle?

Stock Market Technical Analysis

click on image to enlarge

In the market Monday, we had additional technical failures once again.  The S&P has suffered small, medium, and large EMA down crosses in the past two weeks.   It has fallen out of its two year Fed bubble channel shown with blue lines in this chart.  Plus, it has also sliced through its 200 day line today as if it were butter and the selling only appears to be increasing.  It may be time to seriously consider if Wall Street has begun reining in its 7-year cycle.  

Over the past twenty years Wall Street has been maintaining a cycle whereby the market peaks every seven years.  It was used heavily in earlier decades but during the late eighties it stopped.  Then as the computer revolution began in the early nineties the 7-year cycle began again.  In the chart I have posted, it shows the three 7-year spans each culminating to a peak at the end of the month of September in the years 2000, 2007, and now 2014. 

Studying the chart closely, it's easy to assess that the 2-year stock market bubble has just burst as we slipped out of the blue line, super steep, 2-year channel and it happened right as the third seven year span came to a close last month.  


Trade well my friends


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