May 6

I received several comments on my last post. Several were well-meaning. One was not. But I think all missed the point of the post.

I wrote that my 60-min Trend System issued an emergency sell signal, and that the sell signal was not the result of a normal exit criteria. There are several conflicting signal indicators happening at once on my 60-min system. We also have a lot of sharp reversals happening at range boundaries (like in a large triangle) that make it extremely difficult to interpret what is happening in the short term.

And that was the simple point of the post: The short term is proving very difficult to predict based on the plethora of conflicting signals.

It was suggested that I needed to take a step back and take a look at the bigger picture. While well-meaning, this misses the point. I frequently take a step back and look at the bigger picture. In fact, I had two posts in the last 3 weeks that did precisely that: Long Term Projection, Macro, and an Analysis Retrospective and May 2.

The point is that I was properly and publicly bearish in May 2011, bullish in Oct 2011, and I stated that we are getting close to a top but not yet at a top here. And that further I don't think that this coming top will be 'the' top of the cyclical bull market.

But absolutely none of this has anything to do with Friday's post which was a comment on the 60-minute Trend System and the short term timeframe.

Anybody who has been following my work knows that I think and discuss market behavior in several different timeframes and that I try to illuminate when people improperly try to think of the distinct time cycles (60-min, Daily, Weekly, etc.) as happening all at once. This almost never happens in real life. We often have, for example, a 60-min cycle in a down trend with a Daily Cycle in an uptrend, with a Weekly Cycle in a downtrend, etc. My baseline position is that we are currently in a cyclical bull market in the middle of a larger secular bear market.

So while I appreciate the general advice that stepping back to look at the bigger picture is useful, I think it is also unwarranted.

Regarding two specific points:

1) Several Weekly Indicators are rolling over.

Very much agreed that they are. But I disagree that this means a top is 'imminent', I think it only means a top is near. That was the point of this post: May 2. The lower PPO (orange) on the daily chart is slowed down, which makes it behave like a weekly indicator. It has not really gone into divergence yet, which it did at both the 2010 and 2011 tops.

In short, I think trying to call a top right here is rushing to judgement. Just my opinion.

2) That I have finally gone 'bullish' at the end of this wave.

This a fairly ridiculous comment and shows that this commenter doesn't really read my work. I have called that last two major waves in real-time (as documented here: Long Term Projection, Macro, and an Analysis Retrospective) and have been bullish since October.

But the aspect of this comment that I would like to address in my 60-minute system. My 60-minute system performed spectacularly last year: Jan 2. But this year has been dismal. It is 0 for 10. And specifically it was trying to catch roll-over tops that never occurred, and the last signal was a sub-cycle long which was confirmed by a 60-min Up Cycle signal that as of Friday looks like it will be a failure.

So this commenter says incorrectly that I am now 'being bullish' (which I have been since Oct 2011) when they are likely confusing the performance of my Trend System which is dispassionate and has nothing to do with my independent analysis. However, I am owning up to the fact that my 60-min Trend System has been badly faked out this year.