Cycles, Cycles and more cycles…

There was an interesting article in Barron’s Getting Technical this past week. Though cycle analysis is not one of my primary tools in my trading box, I do use it as an ancillary indicator. The bottom-line of the article is a prediction for long-term cycles in equities to bottom in Nov 2008, interest rates to bottom (bonds top) in Jun 2008 and commodities to continue higher into Feb 2010 (George Soros seems to agree) . Oh, and by the way, some of my own cycle analysis is pointing to the next 3-5 days as critical for the indices, bonds and crude oil.

Home on the Range

The US indices have been range bound for the past eight days with the SP futures confined to a roughly 1349-1389 consolidation area.  The Nasdaq futures (NQ), my primary focus, have traded an 1824-1894, 70 pts range for the prior with days.  Buyers are active below 1840 with sellers stepping in above 1875 with key levels at 1842/1843 and 1852.  Until there is a close below 1835 or above 1870, this range will persist.  Note that on the downside there is an unfilled real gap at 1796-1813 from 03.31-04.01.  Stay tuned…day 9 is set to begin with the market trading down on disappointing GE results.