Rethinking the Possible Mid June 2011 Top Theory

I am starting to think that this market may not be ready to top at the mid June 2011 Marty Armstrong Cycle Turning point.  I have written many times about how this could be a possibility, but from now until Mid June 2011 is just not that much time.  I have a hard time seeing the sp500 getting all the way up to 1470 by mid June 2011.  It just does not seem to fit in with the larger yearly chart structure.  Mid June 2011 may just be a temporary turning point similar to the 1997 or 1998 turning point. 

I could speculate on and on.  Perhaps it is just best to wait and see how the charts start to look in early June 2011 and make an assessment at that time.  For now the sp500 seems to want to trend higher yet still.  If the market starts to setup into an important top mid June 2011 then perhaps there is a trade in one of the inverse ETFS for a short to medium period of time, but it may just be a ‘shotgun’ type trade.  I would though definitely be keeping an eye on the gold and silver markets for a possible interim top in Mid June 2011 (not final top).

I still think that the massive broadening wedge theory I proposed some time ago is still likely to be in play.  This broadening wedge theory would fit a scenario where the investment public all get very excited to see the market seemingly trading in new high ground, only to realize that it will be stopped by a 10 year top broadening wedge resistance line.  Problem is, that top line may take 1 or 2 years before it gets hit, possibly until after the 2012 USA presidential election.

Then on the flip side we are in a situation where the sp500 is making a third trip up to the long term resistance.  It is not uncommon for any market or stock to succeed in breaking out on the third try.  It is hard to conceptualize the market breaking into new life time high ground already given the inflation outlook, but maybe it is different this time ?

The 1970’s was a period where the market continuously struggled to break 1000 and then got the life sucked out of it due to inflation.  Market then had to wait all the way until 1982 before new life time highs were achieved.  I just don’t see how the market can continue to zoom vertically higher beyond the broadening wedge with a heavy dose of inflation on the way.

Posted in Long Term Trading
2 comments on “Rethinking the Possible Mid June 2011 Top Theory
  1. Larry says:

    Markets have a way to go before they reach a life time high. That occured back in Oct. ’07 NAZ in ’00. We broke thru new highs here today since the crash but appear to be pulling back some. We will definitely have a pullback here soon in the next few days(IMO of course). As to where the market is going…jessh at this point it is anyone;s guess. Today it seems NAZ and SPX have gone SAR on the monthly. Figure SPX at about 1400 range before we run into major resistance.

  2. Tom says:

    Yes they sure do.. but also depends on which index we look at.. DJIA looks like it is within striking distance and the large numbers of the DJIA make the final hurdle quite achievable in point terms.

    RTH is close to life time high… yes Nasdaq is lagging badly but it tends to move faster on the up and up than anything else.

    Longer term I like my massive broadening wedge theory for the sp500 which could have the market make a very minor new life time high around the time of the 2012 elections.. then once election is over, the market tanks and starts new bear market based on lame duck presidency.

    In the near term though, with the sp500 blasting higher to new ground today, I still think we have some type of good opportunity at market making some type of top on the Mid June 2011 date… may try shorting the market near that time if everything lines up.. will have to see…

    Perhaps this Mid June date also will line up with the vote on the debt limit increase.. if it lines up on the exact date of June 13, 2011 it will be utterly fascinating…

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