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UPDATE 01/06/07
Has
the stock market finally started the correction or
is this just another minor retreat to be followed by
higher prices later this Month?
The longer term
cycles that I follow; the 20.5 year, that bottomed
in October 2002 and the 4 and 8 year that bottomed in July
last year should continue to support higher prices
this year.
I went back and
reviewed the previous 4 and 8 year cycles to see how long
it took from the low before a decent correction took
place.
The
1998 low was followed by a 53.6% one year advance
before a 12.2% correction.
The 1994 low was followed by an on 61% 18 month
advance before a 10% % correction
The 1990 low was followed by a 31.9% one year
advance before an 8.4% correction.
The 1986 low was followed by a 54 % 11 month advance
before a 31 % correction.
The 1982 low was followed by a 68.4% 16 month
advance before a 16.8% correction.
The 1978 low was followed by a 16 % 10 month advance
before a 12 % correction
The 1974 low was followed by a 56% 7 month advance
before a 12.2% correction.
The 1970 low was followed by a 51% 11 month advance
before a 16 % correction.
The 1966 low was followed by a 29.3% one year
advance before a 14.1% correction.
So far the market has advanced about 18% from the
low of last July.
It is possible that
the market could correct 5-6% though before the next
advance to new highs. I will remain positive on the
DJIA until it moves below 11,670.
The up trend from early December has been broken.
Resistance is now up at 12,500 and support around
12,200 - 12,300. If a true correction is underway, I would
look for a low below 12,000.
Gold didn’t
get off to a very good start, losing $ 30 an ounce,
falling back down to around the $ 600 level. I have
been waiting for this correction to end; looking for
another large up move to take place. However, if
gold and gold stocks can’t regroup rather quickly
next week, I may have to temper my bullish outlook
for now.
From a cycles view,
this market is running out of time to challenge the
highs set last summer above $ 700. The next major
low, 8 year, is due in 2009.
The down move shouldn’t go much lower or a re test
of the October lows will result. Need a move back
above $ 620 early next week.
Regards and Good
Luck
Jay Sanderson
TimingStock.com
To
see Jay's past Market Commentary and other products
please click here
www.reliablestockcycles.com
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