60-Year Master Cycle Rules – But…

Good Morning:

• I will be in the Trading Room this morning for the first few hours.
• The market (S&P 500 Futures) will open at the top of the recent trading range.
• Balance Rules are on the table. And it is a wide, 100-point range from 4100 to 4200, forming a triangle consolidation and marking upper and lower major resistance and support.
• We expected the consolidation, as the indexes were parabolic at our exit last Thursday (around the 4190 level) and the 60-Year Master Cycle showed a small downturn.
• The bulls want to reach out to the August high at 4327.50 to complete a full, octave wave from the October 13, 2022 low.
• Even though we called the October 13th low, I am still amazed that the market has recovered this far. As I mentioned on these pages when I was putting together my outlook for 2023, I could not believe what I was seeing due to the 60-Year Master Cycle forecast.
•  Well, here we sit with the proof in the pudding. Thus far, the market is following the 60-year cycle forecast with a correlation of 86%. While crowd psychology is the most bearish I have seen in a log time – it didn’t stop us from following the forecast as the stock market climbed the wall of worry.
• As I have often stated, to be successful in this business I subscribe to the axiom that time is more important than price. We always look back 10, 20, 30, 60, and 100-years for guidance and analogous chart patterns. I also build a compression forecast combining all of the relevant cycles together to create a line forecast. 
• We also look back 15 and 45-years if the cycle fits. For example, the NASDAQ is following the 45-Year Master Cycle (the NASDAQ hasn’t yet been around for 60-years).
• But I also mentioned in early January that price would eventually find a fork in the cycle road. We are rapidly approaching that fork.
• There are two panic cycles in our cycle DNA, 1903 at the 120-year point and 2008 at the 15-year point: