♁- A good target for the panic cycle implied by an inversion of the Master Cycle is the midpoint of the 100-year channel shown above.
♁- Keep in mind that this is a monthly chart. It moves very slowly until it doesn’t. You can analogize it to the two previous bears starting in 2000 and 2007 out to the left side of the chart. Both of those declines exceeded 60% on the futures contract. Remember that this is a log chart. The current slide will look understated compared to the previous two bears.
♁- If we take an average of 60% for the two previous bears and project it to the current bear, we land right in the middle of the current circle (a circle is the three-dimensional representation of a cycle).
♁- Depending on how quickly the price would get there, it would join the middle of the rising 100-year channel, roughly 3000 or so on the S&P 500 Futures contract. Note that this was our original forecast from January 2022
♁- Geometrically, the next market reversal (from the direction leading into it) comes this summer (July) from a monthly chart perspective.
♁- This is not a forecast. With bulls and bears still wrestling for control, prognosticating would be unwise.
♁- But the chart immediately above allows us to examine a possible worst case for a fully invested bull if the price breaks the pattern and stays below the red line. Obviously, a bear would smile ear to ear for the given opportunity.
♁- Right now, and viewed solely from the monthly chart perspective, the battle is about breaking above that falling red line for the bulls and maintaining price underneath the line for the bears.
♁- Note that investors must be careful in triangles. Often the first breakout fails, and the market completely reverses, eventually breaking out in the opposite direction. Your tactics must take this risk into account.
♁- And don’t forget that any break below 180^ will cause the price action to accelerate. It falls off the proverbial shelf, and gravity takes over.
♁- All of this raises the question, do we abandon the 60-Year Master Cycle over a couple of poorly managed banks and a poorly managed country? Sorry for the loaded question, or the answer would be an obvious “yes.”
♁- A better way to analyze a potential cycle inversion is to realize that brief anomalies will occur only to see the cycle resumed. Also, Forecasts derived from 60-year-old data have inherent limitations. As examples. planetary differences and non-trading days (such as weekends and holidays) don’t always align.
♁- Below, you can see the difference between the full 2023 forecast for the Dow until the end of March compared to the current actuals: