| - Sample: The MMA Cycles Report |
| Written by Raymond Merriman | |
The MMA Cycles Report
Vol. 23, No. 16 Review and Preview:We are presently in one of the most heavily populated geocosmic cluster zones of the year, November 14-December 10. The midpoint of this cluster is November 27, which just happens to be the exact date that Jupiter forms its waning trine to Uranus, one the strongest of all the Level One geocosmic signatures this year, according to studies reported in The Ultimate Book on Stock Market Timing Volume 3: Geocosmic Correlations to Trading Cycles. As we enter the center of this huge geocosmic cluster, we note that Gold is once again testing 500.00 for the first time in 18 years, and many stock indices throughout the world are making all-time or multi-year highs. Foreign currencies and some grain markets, on the other hand, are making new yearly lows. Another important geocosmic signature unfolds December 24, known as Venus retrograde. Like the Jupiter-Uranus aspect of November 27, this is another of the most powerful Level One signatures in effect this year. Both the Jupiter-Uranus aspect and Venus retrograde have a 78% correlation to primary or greater cycles within 9 (Jupiter-Uranus) or 12 (Venus retrograde) days. The last two times Venus turned retrograde was October 10, 2002, the exact that U.S. stocks formed their 4-year cycle trough, and May 17, 2004, when currencies made their first leg of a double bottom to their 26-month cycle trough. Gold and silver also made their 18.5-monmth and 111-week cycle lows then. Neither has looked back at those lows and they have maintained a bull market since. Venus will be in retrograde through February 3, and this is typically a time when Central banks issue very conflicting signals involving the future direction of interest rates. Such announcements could create trend reversals in Treasuries and currencies, and indirectly (or directly) have an impact upon other financial markets. And finally, we need to keep in mind that both Mercury and mars are currently in retrograde motion for another 1-2 weeks. As stated last issue, “And now we prepare to enter a Mercury retrograde period, November 14-December 3. This will be on top of the Mars retrograde period also currently in effect, October 1-December 10. Each of these tends to coincide with “fake outs” and false technical signals.” Fortunately it ends soon. Unfortunately, Venus will soon after begin yet another retro gradation period with the same characteristics. Critical Reversal Dates:Look for cycle turns in many markets within three trading days of the forthcoming critical reversal dates:
U.S. Stock Market Tests Yearly Highs:The week of November 28 begins the 7th week of the new primary and 50-week cycle. As expected in the first phase of a new longer-term cycle, the U.S. stock market is rising sharply. It is already testing the previous 50-week cycle crest, which was the high of the year recorded on March 7 at 10,984 in the DJIA. The nearby S&P futures has already exceeded its previous high for the year, which was 1250.30 on September 9. Last week, the December contract went as high as 1272.70. Thus we currently have case of potential Intermarket bearish divergence, where one market has made a new yearly high, but it is unconfirmed by a related market. However, since this is only the first major cycle phase, of the first primary cycle phase, within the greater 50-week cycle, this divergence may only be temporary as the major or half-primary cycle crest unfolds now. Once this crest is in, we will look for a decline to either a 5-7 week major cycle trough, or 8-11 week half-primary cycle trough. Then there will be another rally. If that rally fails to make new highs in both indices, it may be the start of a significant decline, perhaps by 20% or more, as the bearish phase of the 4-year cycle gets underway. As stated last issue, “Assuming this is a new primary and 50-week cycle, November 7 begins the 4th week of these new cycles. In the past 43 years, the highest price in a new 50-week cycle has not been achieved before the 8th week, so I expect prices to continue higher before we take out the lows of 4 weeks ago. Thus our strategy is to buy declines now.” The first such decline is due to commence at any time. If there is to be a 5-7 week major cycle trough, then the decline may be minimal, and completed by the end of this week. If instead this is going to be a two-phase primary cycle, consisting of two 8-11 week half-primary cycle troughs, then the decline will be more substantial, with prices at least testing (and probably breaking) below the 25-day moving average. That moving average is now at 10,576 in the DJIA, and 1222.05 in December S&P (we will switch to March next week). I favor this last outlook, and if correct, I think bottom could very well happen within a few trading days of Venus turning retrograde (December 24). The last 5 instances of this 19-month planetary cycle have coincided with four primary cycle troughs, and one half-primary cycle trough, within 9 trading days. Traders would be advised to stay with the trend, and buy that half-primary cycle trough. Prior to that, aggressive traders only might look for a chance to sell short, in anticipation of 45-85% decline of the swing up that started with the primary cycle low of October 13 (10,156 in the DJIA and 1172 in December S&P). Longer-term, it is my belief that this is the fourth and last 50-week cycle phase of the greater 4-year cycle. Since this has been a bullish 4-year cycle (longer time spend going up, shorter spent going down), we can anticipate that the most bearish characteristics of this entire 4-year cycle will happen in this 50-week cycle. That means that once the crest is in, the sharpest decline in 4 years will likely unfold. It also means there is a greater probability that this 50-week cycle will exhibit a bearish “left translation” pattern, which means it spends less time going up (i.e. less than 25 weeks) than coming down. Ideally it would suggest that the crest of this primary cycle remains within 2% of the previous 50-week cycle crest, therefore forming a “double chart” pattern. In the DJIA, that means prices would remain under 11,204. One can also see a trend line connecting the high of 2004 with the March 7, 2006 high, and it too comes out slightly above 11,200. So our best guess is that we are within 300 points of the high of this new 50-week cycle. Yet we don’t want to advise being short sellers until 1) we know the trend has changed, or 2) we are late in the primary cycle (i.e. in its second half). Any close below the 25-week moving average would strongly suggest the 50-week and 4-year cycle crests are in. That average is now at 10,524. The 4-year cycle trough is still due March-December 2006, at prices 20+% below the highs that form for this current 50-week cycle. The 50-week cycle trough is due June 5, 2006-January 26, 2007. So watch closely the overlap period for the trough of both cycles, and the next great buying opportunity. Short-Term Reversal Dates in U.S. Stocks:Look for 2.5% or greater reversals in U.S. stock indices to unfold on these lunar reversal dates, or at most, one trading day before or after.
Gold and Silver Break Out Again to Upside:After falling to 456 on Friday, November 4, to form an expanded 22-week primary cycle, Gold has soared to its highest level since December 1987, testing the 500.00 mark. Interestingly enough, December 1987 was when the 18-73 year Lunar Nodal cycle last crossed the 0 Aries (vernal equinox) point, a point that tends to correlate with major trend reversals occur in many financial markets within 7 months. The next instance of this Nodal cycle will occur in June 2006. The week of November 28 starts the 4th week of the new 18-week primary cycle. An MCP (Mid-Cycle Pause) price objective is in effect at 514 +/- 10.70. It also appears that this is a 5th wave of an Elliot 5-wave pattern, and the 15-week slow stochastics are overbought. Both indicators suggest that this is the end, and not the beginning, of the longer-term 18.5-month and 4.25-year cycles. As stated in the Forecasts for 2006 book, “Measured from the April 2001 low, the next instance of the 4.25-year cycle would be due July 2005 +/- 8 months. Once the top of this 4.25-year cycle is completed, a “corrective decline” of the whole move up from the April 2001 low will unfold. In the meantime, the first major resistance is the 490-520. If that is exceeded, then there is a “measuring objective” of the breakout above a long-term trendline of 654.00 +/- 47.00…,Gold also exhibits an 18.5-month cycle, with a normal orb of 15-22 months, but occasionally distorting to as few as 13 months, or as many as 23. This cycle last bottomed in May 2004 at 372.00, just a week before Venus turned retrograde. The next instance of this cycle trough is due August 2005-April 2006.” Shorter-term, a 5-7 week major cycle trough is due December 5-23. Unless prices fill a gap at 483.50 in the February contract, traders can look to buy that major cycle trough, and thus stay with the trend. More aggressive traders may wish to look for shorting opportunities now (before December 12, before the down trend can be confirmed, on the basis that there are several geocosmic signatures in effect between now and then that correlate with reversals in Gold prices. And since a long-term cycle top is due, these traders may wish to probe the short side on any highs that form near to these geocosmic signatures (November 28, December 1, and December 10). Any move below 456 means the crests of these longer-term cycles is complete. March Silver is now starting the 13th week of its 13-21 week primary cycle. A 7-11 week half-primary cycle trough occurred at 750 on November 1, so this starts the 4th week of that cycle. The MCP price objective for the crest of this second half-primary cycle is 872 +/- 23. We may be seeing a pullback begin any day now into a 4-6 week major cycle trough, due November 28-December 16. A normal pullback would find prices dropping 30-60 cents from the crest forming now. Longer-term, a break below 750 could be the first sign that the 4.34-year cycle has topped out, and prices could be down sharply for several months. As stated in the forthcoming Forecast For 2006 book, “The third and final 37-week phase )f the 111-week cycle) is thus due March 27-July 7, 2006, or within seven weeks of the week ending May 19, 2006. In this 111-week cycle, each low has been higher in price than the previous 37-week cycles. Therefore it has been a bullish 111-week cycle. This means the steepest decline of the entire cycle (since May 2004) will take place from the crest of this current 37-week cycle. There is an MCP price target of 908 +/- 42 for this cycle crest, if it can exceed the 823-831 double top of 2004" Very short-term, the Sagittarius Factor is in effect December 1-2. Look for an isolated low or high, followed by a minimum 15-25 cent reversal. Usually the first day is a crest, followed by a sharp drop. If a decline to major cycle trough by December 16 fails to break under 800, another rally is due to follow the major cycle trough, and possibly as much as 30-60 cents. But the decline after that rally is expected to be more substantial, and last 2-5 weeks into the final primary cycle trough. T-Notes and Currencies:March T-Notes fell to 12-week half-primary cycle trough at 107/09 on Friday, November 4. As stated previously, “The period around November 4 is extremely critical for T-Notes. If prices find support here, we may see a rally to a half-primary cycle crest then.” Bingo! T-Notes are now rallying to the crest of the second half-primary cycle, with a normal price target of 109/07-110/12. We are there, and this is a critical reversal zone for T-Notes (November 28). In addition, the Sagittarius Factor is in effect December 1-2, as the employment reports come out. T-Notes oftentimes make an isolated high or low within one trading day of this lunar cycle, and then reverse 1.5 – 3 points. Therefore if we see a new high form between November 30 (Wednesday) and December 5 (Monday), traders would be advised to look for opportunities to sell short. Once this half-primary cycle tops out, look for prices to retest or break below the lows of November 4 as the primary and 8.5-month cycle trough unfold, quite possibly in December. This starts the 16th week of the 18-26 week primary cycle. Both the Euro and Swiss Franc fell to new yearly lows on November 16, hitting 1.1665 and .7549 respectively. We sent out a special currency report on the Euro to all subscribers on November 20 outlining why I thought the currencies were forming their long-term cycle lows. And as stated in our last issue, “We must also keep in mind that a longer-term 26-month and 4-year cycle trough is now due, ideally within 4 months of right now – November 2005… As a long-term investor, I would be willing to start initial purchases for the long-term even now, at these levels, and start averaging down each month, if that is the path.” With today’s sharp rally, it is beginning to look like those lows may have been completed November 16. If so, it was a distorted primary cycle, as that was only the 19th and 17th week of the 22-33 week primary cycle in the Euro and Swiss Franc respectively. But contractions like that are possible when longer-term cycles come due. If the lows of November 16 were only 5-8 week trading cycle troughs, then this rally will only be corrective, with price targets of 1.1957 +/- .0069 and .7746 +/- .47. We are already there, so this is a critical period for currencies right now. But the 15-day stochastics look very bullish, so I lean more to the bullish camp. On any pullback into December 10 (Mars direct) or December 24 (Venus retrograde) +/- 1 week, traders are advised to look to buy. Investors, per last report, can continue to probe the long side, and add on with new highs above 1.2250 and .7950, or new lows into either of these reversal zones. Grains:March Corn continues to make new contract lows as we enter this week’s critical reversal period, Thursday’s new moon, and first notice date for the December contract. I believe a significant low is forming in this period, and therefore aggressive traders can look to probe the long side at these very cheap levels this week. March Soybeans are also making new contract lows in this reversal period, with support around 550, but also down to a measuring gap target of 512 +/- 13. On a close above 606, the seasonal low will be confirmed. But even before then (this week), I think aggressive traders can go counter-trend and probe the long side, for a 20-50 cent rally. However, failure to close above 600 on the next rally could see another move down. March Wheat also made a new cycle low today (Nov 28), which is the 13th week of its 15-21 week primary cycle. The geocosmic signatures in effect today have a correlation to primary or greater cycles in Wheat, +/- 1 week. Therefore traders might consider probing the long side here too, in anticipation of a possible cycle contraction. We need to see a close above 330 to support the bullish view. But since all grains are in a time band when long-term cycle lows could be forming (per Forecasts for 2006 book), and this is a critical reversal week, I prefer probing the long side now, and even into the Venus retrograde period of December 24, which is another signature relevant to Corn and Soybeans.. Crude Oil:Since its August 30th all-time high of 70.85, Crude Oil has been trending downward to a low of 56.35 on November 18, for a loss of over 20%. This confirms that the 4-year cycle topped out on August 30. Within that 4-year cycle are also two or three 18-month cycles. We are in the third one now, and it is due to bottom April-August 2006. There 38-62% correction level of the 18-month cycle shows support at 55.87 +/- 3.55. Still, since the 4-year and 18-month cycle lows are not due for another 4-8 months, I would expect the next rally to be followed by at least a retest of these lows again during that time band. As this 4-year cycle trough unfolds, the primary cycles are becoming distorted. We are now in the 27th week of the normal 15-23 week primary cycle time band. That low could be forming now, for as stated last issue, “Watch that November 28 period as another critical reversal period for Crude Oil, +/- 3 trading days.” Today (Nov 28), we tested the low of November 18, and held. A move above last week’s high (58.50) might be enough to start the up phase the new primary cycle with some force. There is also a downward trend line around 62.00 that will likely break when the next primary cycled crest forms. Since we are in the price range for a 50% correction of the swing up in the previous 18-month cycle, aggressive traders can look to probe the long side, expecting a move back to test the 60.00 area. However, more conservative traders would be advised to wait for the next primary cycle before assuming longer-term bullish positions. The next MMA Cycles Report will be issued December 21, and SOS Stock Market Cycles will come out next week, a week earlier than previously planned. Announcement:The Forecasts for 2006 book is now at the printers. It comes out December 15. You can pre-order now and be sure it is sent to you as soon as it comes out. Cost is $39.95 plus $5.00 postage USA and Canada, or $12.00 overseas. You can call us at 1-800-MMA-3349 to order. Or send us an email at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it And the re-written version of The Ultimate Book on Stock Market Timing Volume 1: Cycles and Patterns in the Indices was received last week. Originally written in 1997, the revised version contains all the updated calculations for cycles that include the past 8 years, along with some new material. Even if you have the original volume, it is a good idea to get this updated version as well – for reference. The cost is $95.00 (plus $5.00 postage in USA and Canada or $22.00 overseas). PLEASE NOTE: THIS INFO IS FOR PRIVATE USE OF MMA INDIVIDUAL SUBSCRIBERS ONLY. TRANSMISSION OF THIS REPORT BY ELECTRONIC MEANS OR OTHERWISE IS ILLEGAL UNLESS PERMISSION TO DO SO IS GRANTED BY MMA, INC. © Copyright by Merriman Market Analyst, Inc. No part of this may be reproduced or copied without permission from MMA. Disclaimer: All information provided herein is based upon MMA's technical, cyclical, and geocosmic analysis, and the integration of each of these factors. It is presented with reliable intent. However no claims for future accuracy are being made, no can projections be guaranteed. Reliance of information in this report is at the sole risk of the reader. Future strategies are for the aggressive trader. |
