What Is The Likely Direction?

Many times in the past I've pointed out the cyclical nature of the markets. The S&P 500 has a cycle of about 6 weeks in length. Pick any period over the past two or three decades and you'll see this cycle (it may help to display the chart on the screen, and then stand up and walk backwards 3 to 6 feet. It will become more obvious. The other way is to look at the daily stochastics – that indicator tends to make the bottoms evident).

The width of each cycle varies slightly. Sometimes a complete cycle forms in about a month, sometimes it will be 2-3 months, and on occasion, the cycle may disappear for a few months (or be hard to spot). But it pretty much averages out to a month and a half.

As this chart shows, the S&P 500 is at what may be another short-term cycle high:

There are no guarantees the overall market will turn downwards at this point. It could very well rocket upwards from here. But successful trading comes from a respect for the odds. The odds right now favor a turn to the downside. It may start today, it may take several days to develop, but bullish short-term positions stand less of a chance of working right now, and bearish positions have higher odds.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, please click on the following link: www.markettamer.com/seasonal

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2015 Stock & Options Training LLC

Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.

Gregg Harris is the Chief Technical Strategist at MarketTamer.com.

The content on any of Market Tamer websites, products, or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options, and other securities involve risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities are not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options (http://www.optionsclearing.com/publications/risks/riskstoc.pdf). The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.

 

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