To Be or Not To Be - A Bull or a Bear? | Archimedes Methodologies

Good Morning:

Our flagship market proxy, the S&P 500 Index, has performed impressively from the October low. More importantly, it correlates at 85% to the 60-year master cycle. The bullish behavior is a character change carried deep into most sectors, and the bears have their work cut out for them at this writing.
What the bears have on their side are several cycles entering their topping zone this week. As this coincides with another Fed Meeting and interest rate decision, the fuel for a decline is on the table. I do not doubt that the rhetoric from the upcoming meeting will continue to be hawkish. I expect the Fed will try to swat the market down, as they have done at their last few meetings.
In terms of the cycles, the nominal 20-week Hurst cycle should be topping, and momentum indicators signal it is.

The Kichen Cycle (above), very reliable but somewhat obscured by history, should be topping now and moving down into March.

Even our guiding light, the 60-Year Master Cycle (above), shows some pressure into March, and the 20-year cycle (think 2003) would be even more ominous.
This morning, the overnight futures market breached Friday’s low, terminating the one-time-framing from 1/26. This is a preliminary sell signal, as would violations of the 5-day line and Algo Trigger sitting around 3950.
The market also encounters quite a bit of resistance at the 4100 level. 4100 is the challenge for the bulls to overcome and close to many of the upside targets we identified at the recent lows.
Given that the market is only a few ticks short of the 80-day cycle and line segment targets, this is a perfect place for an “M” foldback/mirroring the left side of the first chart above on the right.
While the Navigator Algorithm is still in a buy signal from 1/20 (likely to turn into a sell signal today), the red down arrow on the first chart above marks where the Founder’s Group went back to cash.
The bottom line? I would be in cash into the Fed announcement Wednesday and be prepared to short if the sell signal formally manifests today. Without price action confirmation of the sell, we need to be ready to jump back on the bull train.
As set forth above and bull or bear aside, we have a unity of cyclical tailwinds for a short position, should it manifest.
As always, I keep an open mind and let the more objective price action dictate our moves. Don’t anticipate it with a premature trade; just be prepared to react to the signals that manifest.
I will be in the Trading Room this week Tuesday, Wednesday, and Thursday.
Tomorrow, I will be on the mic teaching how the machines interpret the price action and how we can use that information to our advantage in day trading.
In the meantime, Rome wasn’t built in a day. So for today, look for support at 3970 and 3925; resistance lies at 4100 and 4125.
At this writing, the market will Gap down at the open with a True Gap, so Gap Rules are on the table.

A.F. Thornton

To Be or Not To Be – A Bull or a Bear?

To Be or Not To Be – A Bull or a Bear?

AF Thornton

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To Be or Not To Be – A Bull or a Bear?

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