Nikkei Continues to New Multi-Year Highs: The Nikkei continues soaring to its highest level in 5 years, touching 14,987 on Monday, November 28. This is nearly a 100% increase from the 7604 long-term cycle trough of April 29, 2003. But we are now in a very strong geocosmic critical reversal zone (November 14-December 10), whose midpoint is November 28 (right now). And as stated last issue, “We also have a new MCP (mid-cycle pause) price objective based on the recent half-primary cycle trough. That MCP is 15,165 +/- 419, which is nearly the same as the previous higher target. If we reach this level, we have to be alert to the possibility of a reversal.” The high forming now is also touching a trend line that connects the highs of 2003 and 2004 on the weekly chart.
November 28 begins the 16th week of the 13-19 week primary cycle. Therefore not only is the primary cycle crest due, but so too is the primary cycle trough. Once the crest is completed, look for the sharpest 2-5 week decline to commence since this cycle began 16 weeks ago. This primary cycle might expand, perhaps to 20 weeks. In fact, it may be more accurate to say that the normal time band is 12-20 weeks, based on the latest studies just published in the revised edition of The Ultimate Book on Stock Market Timing Volume 1: Cycles and Patterns in the Indices.
This primary cycle is sub-dividing into a two-phase pattern, consisting of two 7-11 week half-primary cycles. November 28 begins the 6th week of this second half-primary cycle. Again the message is the same: its crest is due at any time, followed by a strong 2-5 week decline. That decline should see prices falling below the 25-day moving average, which is currently at 14,105 and rising. It may even fall below the upward trendline that connects the primary cycle low of 16 weeks ago, to the half-primary cycle trough of 6 weeks ago. That comes in around 13,700 this week. In fact, if Monday’s high was the primary cycle crest, then we would look for a corrective decline back to 13,301 +/- 398.
Longer-term, this is the second (of three) primary cycles within a 48-week cycle. The 48-week cycle could therefore top out in either this, or the next, primary cycle. But this is also the third and final 48-week cycle phase of the greater 3-year cycle. The crest of the three-year cycle is thus due in this 48-week cycle. Since the three-cycle has been bullish, we anticipate that the most bearish characteristics of this whole three-year cycle will occur in this 48-week cycle. Therefore we have to anticipate that this 3-year cycle crest is more likely to form in this primary cycle, rather than the next. It doesn’t have to do that. It’s just that if this 48-week cycle is going to be the most bearish, then the probabilities are greater that it will spend more time coming down than the other primary cycles before it. We must also consider the idea that long-term cycle crests frequently exhibit a double top formation. Thus I think that once this primary cycle tops out, we will have a steep 2-5 week decline, then another 3-8 week rally that will challenge the highs being made now, then an even steeper decline to the 48-week, 18.5-month, and 3-year cycle troughs, all due at the end of the next primary cycle.
For now, traders are advised to look for signs of a primary (and maybe longer-term) cycle crest forming. I expect that crest to be completed by December 10. As stated last issue, and still valid, “I expect this crest to form any time in the next 4 weeks. Geocosmics point to possible reversals from last Friday’s high, November 14-17, November 25-29, or December 5-12. Be alert if new highs are forming near any of these dates. Aggressive traders can look to sell short any time now, looking for a sharp 2-5 week decline.”
U.S. Dollar/Yen: November 28 begins the 12th week of the 26-40 week primary cycle in the Dollar/Yen. The Dollar/Yen is at a new two-year high, testing the 1.2000 mark as this week begins. Here too we are near the end of the time band when both a major cycle crest and major cycle trough are due (it’s a 9-14 week major cycle periodicity). The concern is that this market is already within the price target area for a 22.5-month cycle crest. As stated last issue, and still pertinent, “The Dollar is thus in the first 22.5-month phase of its new 5.5-year cycle. As the first phase of a new long-term cycle, the Dollar has been bullish (first phases are the most bullish is longer-term bear market cycles, and I think that’s what this is). This now begins the 10th month of this 22.5-month cycle, which has a normal range of 18-27 months. Since my bias is that the Dollar is in a longer-term bear market, I anticipate that the 5.5-year cycle will top out in this first 22.5-month cycle, with a price target of 1.1997 +/- .0216, with a possibility of continuing to either 1.2500 or even 1.3500 areas. One can make a case that the Dollar-Yen is in a huge congestion zone between 1.0100-1.3550. But if it is not in congestion, and instead part of a bearish long-term trend, then this rally in the Dollar should end soon, well below 1.3500.”
There are two geocosmic periods of great importance to watch. The first is happening right now – within a few days of Jupiter trine to Uranus (November 27-28), and Mars turning direct (December 10). The second is Venus turning retrograde on December 24. Major trend reversals in all currencies tend to happen within just a few days of either of these long-term planetary signatures. Therefore I wouldn’t be surprised if the 22.5-month cycle tops out within the next few days. If I were to make an educated guess, perhaps we will see the major cycle crest form now, the major cycle trough form around December 10, and then a final burst up to the primary and 22.5-month cycle crest within a few days of December 24 (say December 21-January 3). The daily stochastics continue to be very overbought - a condition that has been present for over two months now (that’s very long!). Aggressive traders may look to short the Dollar now, or on the rally that follows a quick 2-8 day decline. For more conservative traders who wish to stay with the bullish trend in the Dollar, look to buy this 2-8 day decline of the Dollar/Yen into the major cycle trough, due within the next 3 weeks. This decline should take prices to a close below the 13-day moving average, which is now at 1.1880 and rising.
JGB: Last issue’s report stated, “So we are now within the time band for the 17-month cycle trough… As with the currencies, it is possible we could be seeing the long-term bottom form shortly, perhaps by November 8. The only problem is that a bottom by November 8 would be very early in this primary cycle…. Well, early primary cycles are possible when longer-term cycles are due, and this is the 17th month of a longer-term 17-month cycle. So it is possible. Daily stochastics seem to support this view. But with multiple “retrograde” signatures in effect through early December, I can’t advise being too aggressive from the long side yet. Markets are just too unpredictable during these periods, and also appear to be unstable with regards to sustainable trends. For now, however, traders are advised to wait until this market proves its bottom is in, which won’t happen before a trade above 138.50. Traders are therefore advised to continue selling all rallies that stall out below 138.50 for the next month.”
That low of 135.92 on November 4 held. And the rally has now gotten as high as 138.48, just last Friday, November 25. Although it is possible that was a half-primary cycle crest, and this is now the 16th week of an older 15-23 week primary cycle (as labeled last issue), I think the recent strong rally suggests a more bullish labeling. My bias is now that November 4 was a primary and 17-month cycle trough, and November 28 starts the 4th week of a new primary and 17-month cycle. I believe a close above a prior gap down at 138.52 will support this labeling, and a close above the 25-week moving average will confirm it. Currently that moving average is at 138.80 and falling. Once that happens, then I think JGB is on its way to test the highs of the year, which is 141.24, achieved last June 30.
But there are several geocosmic signatures along the way that can cause issues with this outlook. They are the same signatures mentioned in the prior sections (November 28, December 10, and December 24). Anyone of these could coincide with sizable reversals within just a couple of trading days. For now, however, I would advise traders to buy any corrective declines that occur into anyone of these reversal periods. A 5-8 week major cycle trough time band is coming up soon, and that would be the ideal time to purchase. On a move below 136.00, we will have to abandon this bullish forecast, and revert back to a bearish outlook. I don’t expect that to happen, however.
Next MMA Japan Cycles report due out December 21. |
