Today's Barron's Online column made a case for a long-term bottom in stocks later this year, for bond yields right now and a top in commodities next year. All of this was thanks to the folks at the Foundation for the Study of Cycles so click on the link after you read my missive for more info. I cannot post hot links within my column to anything other than my own work.
It must be stressed over and over that cycle projections not specific turning points to be traded without question. Cycles, or shall I say market action, can expand or contract based on whatever is happening in the world at the time so use them as guides. If you think a market, any market, is going to bottom in six months and you get a marginal technical breakout on the charts today, chances are you should not bet the farm. Play the short-term swing but unless the evidence is overwhelming for a bottom, it might be best to play it more conservatively.
I think we are in a bear market so seeing many months of decline in the cycle makes me feel more confident.
I think bond yields have bottomed so the cycle makes me want to short bonds aggressively.
Jim Rogers thinks commodities have a long way to go to the upside and cycles keeps me believing him, at least for another year.
Not in the column today was the US dollar cycle which has the dollar bottoming right now. Cycles maven Steve Briese, whom many may know for his commitments of traders (COT) work, is looking for a bottom in August. After such a dollar bear market, the difference is not that big.
Again, these are likely bottoms and tops in terms of time. They say nothing about the magnitude of the trends that end there so the stock market could just trade to the bottom of its trading range by then and that could be a bottom. Not much damage from here yet it could be a bottom.
Elsewhere in this blog, I ran a short-term cycles chart of the Dow that called for the bear market months ago. Sorry, but I'll leave the searching to you. We'll probably run an updated chart soon in the Quick Takes Pro newsletter.