Making sense of it

UTX is one of the stocks we use for our DOW cycle work. It has an almost perfect 34 week top to top cycle. Also shown is the elliott wave labelling, Will 34 weeks be another top? It is also getting close to the 200 W ma and the 50% retrace has been achieved.

The 34 Week cycle comes in on the first week of september.

We re-ran some cycle models today. As of now we think -

This is one reason to believe there could be one more push to the 1030 area by the end of august which should resume a bear trend for 2-3 months. Below is the chart of CMA (most holding of BKX are similar).

It has textbook EW labels and is missing a 5th wave. We own some KEY (similar setup) from earlier today with a target of 7$. We believe the breakout could occur in the next couple of days.

What next?

We are looking for an IT bottom around SPX 840 by november, followed a new recovery high to SPX 1150 or so by may 2010. Ofcourse, this is all conjecture until the 34 week cycle is respected in the coming 2-3 weeks.

Look at the chart of JNK:LQD. The move away from risk is going on in stealth. It will come to the fore soon in stocks.