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Four Year Cycle Topped?


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#1 MrHankydoesWallStreet

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Posted 08 July 2004 - 07:26 AM

"THE FOUR YEAR CYCLE HAS TOPPED"
Mr Hanky is getting bolder about such a declaration. As I indicated the LT FCS indicators (Hank o Meter) turned strongly negative at the end of April this year, having gone bullish in April of 2003. However the ST Cubetrader stubbornly was long until June 25th, 2004 when it said SHORT this PIG which I did QQQ at 37.35. Since then the markets have taken a sharp tumble. Next critical support is at the May lows and my view is that if taken out, I for one think it will be over for the bulls for a long time. I will update many of my charts this weekend. Please post your views and charts about the 4-yr cycle. Any other fools want to try to ruin their bearish reputations?

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#2 machinehead

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Posted 08 July 2004 - 08:45 AM

"THE FOUR YEAR CYCLE HAS TOPPED"

The previous 4-year stock market cycle topped early -- in Jan-March 2000, not even rising through the election year as it usually does. It's been more than 4 years since that top. And it may turn out -- in retrospect -- that the highs of early 2004 occurred almost exactly 4 years later.

Although it seems early in the economic 'recovery' due to its weakness, the official recession happened during 2001 ... three years ago. In other words, this economic expansion is getting long in the tooth. A slide into another recession in 2005 or 2006 would produce a very typical 4 to 5-year (trough to trough) business cycle.

What was unusual in the 2000-2004 cycle was that stocks kept sinking for more than a year after the 2001 recession, rather than powering upward from the recession trough as they usually do.

Bulls are inclined to think that it's still early in the rally, but all the other 4-year cycle markers say that it's late. The Fed's first rate rise is another marker that says we're in the late phase of the expansion, not the early or middle phase.

The 4-year cycle is on a collision course with the 11-decade perfect record of positive '5' years. One way to resolve that would be a hard stock market decline in 2004, followed by a recession and stock market recovery in 2005.

But there's no evident funny-mental reason why '5' years should be positive. Maybe it's just a long run of coincidence which will finally end next year. The 4-year cycle would suggest a next economic recession bottom in 2005 or 2006.
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#3 mjkst27

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Posted 08 July 2004 - 10:35 AM

blasphemy! WWCDS? (what would clif droke say?) :lol:

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Posted 08 July 2004 - 01:22 PM

I don't believe in the 4 year cycle B)

#5 MrHankydoesWallStreet

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Posted 08 July 2004 - 06:41 PM

RePost from Gann topic area:

My own analysis (FCS which uses a variety of indicators and has a very profitable history) puts a very high probability that we seeing the 4-yr top NOW with the LT,IT and ST FCS on SP and NDX all pointing down and I have begun entering on the short side.

Currently, if I am correct I fear mining and energy stocks will join the initial downdraft but should show good RS.

From The Elliott Wave Principal regarding the end of wave 2's:

"put option premiums sink drastically as fear turns once again to mania"
"second waves end on extremely low volume and volatility as buying pressure dries up"
"investors are thoroughly convinced the bull market is back"

From The Elliott Wave Principal regarding the end of wave B's:

"B- waves are phonies, bull traps, speculators paradise, orgies of odd-lotter mentality and expresssions of dumb institutional complacency"
"often involve narrow list of focus stocks, rarely technically strong"
"often show more volume than the preceding impulse"
"choppy and volatile"

I have already stated I have a strong wave 2 rather than B wave bias here, either way the next decline could be painful. My only concession is that this wave 2 or B still could morph into a more complex corrective structure than the current A-B-C flat and then become much more difficult to apply EW counts.

Hank

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#6 MrHankydoesWallStreet

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Posted 08 July 2004 - 06:50 PM

I don't believe in the 4 year cycle

The problem I have is believing in the right cycle at the right time :P

what would clif droke say

What does the author of TA for kindergardners have to say about the 4 yr cycle? :D

The Fed's first rate rise is another marker that says we're in the late phase of the expansion, not the early or middle phase.


MC,
Thankyou for your astute observations, I agree the end is here but how bad will it get in this down cycle there is no way of knowing but plentiful reasons to be very worried :unsure:

#7 MrHankydoesWallStreet

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Posted 08 July 2004 - 07:01 PM

Cubetrader says STAY SHORT. This trade well in the money already. B)

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#8 MrHankydoesWallStreet

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Posted 10 July 2004 - 04:00 PM

OIH beautiful, just beautiful.

Great RS on this decline in SP.

LONG OIH
SHORT QQQ

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#9 brian4

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Posted 10 July 2004 - 04:58 PM

Hank- I agree the 4 year top is in, anywhere between yesterdays close and 1125 all Hell is going to break loose. I just posted on my thread that option put premiums will explode upward in price as volatility expands and the Markets fall.

#10 MrHankydoesWallStreet

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Posted 11 July 2004 - 06:58 PM

all Hell is going to break loose


Brian4

Here is the level I am watching closely on SP. I remember when we broke above the 87 1X1 and held...Cubetrader gave a 2 good long trades as it rocketed upwards!. See if we can do the same on the way down.

So far my FCS "Cubetrader" even after this initial drop is stuck in
FULL BEAR MODE!

I don't often add to open positions but this may be a trade in which I do...very tempted to short more QQQ's Monday.

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#11 MrHankydoesWallStreet

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Posted 11 July 2004 - 06:59 PM

AND

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#12 MrHankydoesWallStreet

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Posted 14 July 2004 - 08:41 AM

3rd watch at the 200 DMA on NDX. IF it doesn't hold this time we should get a nice drop (nice for those of us short that is).

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#13 MrHankydoesWallStreet

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Posted 14 July 2004 - 08:56 AM

See good reasons to short the homebuilders LEN, BZH,DHOM,TOL,WY.
Freddie looking real sick and FNM not much better. Lenders also but let's try
WaMu since it is the most poopular.

Shorting today barring a big move down at the open, stop above the last swing hi,
MA bowtie, and huge second smackdown gap and even 40 mark = 42.55

5% risk allocation

short QQQ from 37.35

long OIH

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#14 MrHankydoesWallStreet

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Posted 14 July 2004 - 09:30 AM

Going in for the kill on Ameritrade.

Brokers all look in serious trouble.

Watch for LEH to break the neckline of its huge H&S and pull-back to enter short.
Missed MER and SCH pull-backs.

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#15 MrHankydoesWallStreet

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Posted 14 July 2004 - 09:33 AM

LEH Missed first set up to short but watching for another ---break of neckline and pull back...

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