10/4/18: Stopped on long position for SP500/SSO. Warns the Level 1 that is the most important intra-year trend that began at the Jun low and due to peak late Oct-mid-Nov has lost momentum. Risk of a premature peak is present.
Surging rates is currently the explanation by fundamental traders, but there is more to the story. There are global issues. Watch Italy’s market.
The model shows ideally the 3yr and 9yr long-term cycle trends are up from early 2018 and 2009, respectively. Those trends are to last into 2020. However, lower probability scenarios warn one might want to consider any Level 1 intra-year model-based peak could be a long-term top. The Level 1 occurs about 2 to 3 times per year.