Stock Market on the Brink of a Sharp Correction?
May 12, 2014 by Leave a Comment
In today's post I'm going to make the case for stocks moving down into a sharp correction over the next 4 weeks. To begin we need to examine the last two intermediate cycles. Normally an intermediate cycle will run roughly 22 weeks. Well in our case the last two cycles were both stretched to 32 weeks by the Fed's QE3 programs. As you can see in the next chart both intermediate cycles had 4 smaller daily cycles embedded within them. This is pretty unusual as most intermediate cycles only have 2 or 3 daily cycles nested within. The market is now in desperate need of a short cycle to balance out these two long cycles.