The primary cycle has turned UP (PRIMARY CYCLE SHOCKS - INTERMARKET CYCLES), primary bottoms are rarely V shaped and can be retested or sizeable retraced. So prices should be turning down and bottoming soon and not killing time at this juncture. Second, in the 30 year JUGLAR cycle (SLIDE1) we are running the last 10 year cycle. There is a large primary (more than 9 month) rise pending before that markets fall back into the 2011-2012 lows. The more we stagnate and fail to take out pending negativity fast out of the system, the more markets eat into potential bullish reprieves.

On the intermediate degree, DOW has pushed up 6% since we wrote about the GOOD, BAD and UGLY (24 MAR) situation at DOW and how the best two weeks since 1938 did not mean much. Now that 2 months have passed and we are heading into JUN, our UP BUT TOPPING view is getting a bit time constrained. Failure to fall after the time cycles has turned down suggests two aspects. One that prices are strong and are consolidating (continuing) and getting ready to overrule ongoing negative time cyclicality and push up further and primary cycle bottom might indeed be a V this time. Second, time translation (extended up, and fast down move) suggests that prices are just trying their last bit of strength and to catch up with time they will have to fall fast and sharp soon. At this stage we have little reason to believe that markets are consolidating for a larger bout of strength. We think markets are just translating in time and the fall ahead is going to be dramatic.

A few more reasons. Real strengths come from IMPULSIVE (motive and five wave moves) and not CORRECTIVE (counter trend overlapping structures). It is tough to label the current move up on DOW as impulsive, it is more corrective (W-X-Y) (SLIDE 4). Therefore even if the prices don’t fall immediately, the move up should be painful and choppy like it has been till now with more resistance coming in at higher levels. The real strong upmove may not happen till the second week of JUN. Above this small Harami Star on DOW (SLIDE 2), KEY FIB resistances on S&P and NIKKEI (SIDE 4,10), intermediate TIME CYCLE topping on SSEC (SLIDE 5), all time monthly gapping moves on SENSEX and gaps on N225 (SLIDE 9,10), Intermediate channel break down on DAX (SLIDE 6) still suggest caution rather than sustained positivity.

Though low probability above 8,500 prices could wriggle up to 9,000, but then as we said the move down should be fast. Only sub 8,200 do we move from UP BUT TOPPING to DOWN.

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