BraVoCycles

NDX - Short Cycles

· Short cycles have been very helpful in the confusing market over the last 3-4 months.

· They work well in sideways, range markets, but could be largely ignored in trending markets when multiple long cycles are pointing in the same direction.

· Hurst nominal 10D, 20D, and 40D, 8td, 16td, and 29td cycles in NDX were exceptionally helpful.

· They are expected to peak early in the week; always allow some +/- tolerance around projected peaks/troughs.

· Overall, these three cycles suggest a choppy downside bias into early October.

NYSE Common Stock Advance-Decline Line vs Market Rotation

· You might remember that in late May I speculated that we could see some rotation from the mega-cap stocks and semiconductors into the broader market that could last a couple of months.

· It did happen.

· You could see that from early June until mid-August the A-D line was trending higher while the SPX was essentially moving sideways, and NDX (not shown) was slightly weaker.

· The A-D Line has been declining since mid-August and broke below its 200D MA, which usually implies it might touch, or worse, the 400D MA.

· The rotation into the broader stock market from mega-cap stocks started to fade in mid-August.

· Lately, on multiple occasions, the broad market weakness, often when oil prices were up, was masked by strength in several mega-caps.

When these mega-caps correct, the market may experience additional downside.