Last week I mentioned the possibility of an intermediate cycle low for the stock markets. It appears as though that has been put off.  An intermediate cycle low on average lasts roughly 18-25 weeks. However, during periods of quantitative easing it’s not unusual to see an intermediate cycle run 30 weeks or longer. It now looks like the markets will challenge new highs before that occurs, Here is what the intermediate cycle lows have looked like in the past.

 

Today’s market action would imply that we are going to try to rally before the next FOMC meeting, and test the 2500 level for the S & P 500. With the FOMC meeting on the 21st I expect that we will see new highs sometime in the next 8 days.  I think stocks then will start moving down into a deeper correction. One that fills the requirement of breaking the intermediate cycle trend line and produces a failed daily cycle. I realize that this may be a little technical for most of you, but, I need to give you some explanation of what appears to be happening.

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