Market Cycles Update Feb. 2023

Long-term and short term cycles update

Please find below current cycle charts for the global markets. 2023 will be important in regards to time the expected bottom of the long term model. Audio commentary at the bottom of the post.

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» Long-Term Cycles Model - Original Review and Update

1. Original Cycles Model from October 2021

   Summary: Pointing to the major low around May 2023

   

2. Updated Long Term Cycles Model - Jan. 2023

   Summary: Pointing to the major low around Sept. 2023

   

3. Updated Long Term Cycles Model - Feb. 2023

   Summary: Pointing to the major low around July 2023

   

Long Term Model Summary:

We are approaching the bottom of the long term cycles model from 2021 now in 2023. The period between May and Sept. 2023 looks like the long term bottom forming period.

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» Apple Composite Cycles Model Update

I am following Apple as proxy for the technology sector since late 2022 with continuous update on the composite model below. The daily model has shown us the bottom from Dec. 2022 ahead of time. Now awaiting a daily top for March 2023.

Interesting to note that the “cycles energy model” (bottom of the chart) has reached its peak and is already declining. So even if the composite model has some time left until the final composite top comes in March, the energy from those cycles is declining now. As Apple has seen a very energetic up-move already, expect the final up move to be more “calm” due to the declining upwards cycle energy.

Daily Apple Model Summary:

The composite model tops out in March, expecting another downward move afterwards. As the composite cycle energy is now declining from its peak, more upward move in price seems to be limited.

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» Daily “Technical“ Cycles Update

There is a current daily cycle on the SPX around ~280 trading days, which is topping right now.

Using this dominant cycle to fine-tune our cycle swing indicator, the following technical situation shows up:

The cyclic-tuned RSI is indicating a “sell” signal for the first time again since November 2021. While in parallel we can see a divergence forming between the cycle momentum (bottom) and the price behaviour. Which is a technical bearish situation forming now on the daily chart.

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» Overall Summary:

We still expect the bottom of the long-term cycles to be reached in "late summer". So the final low may not yet have been reached. In the meantime, the short-term daily cycles have exceeded their positive momentum from January, and the momentum of the "cycle energy" is already decreasing again. By March at the latest, the daily cycles are also turning negative. The technical cycle-tuned indicators are now showing the first sell signals. The period until March could thus usher in a further downward movement. Be careful if you followed the "cycle long" daily momentum from January.

Regards,
Lars

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» Audio commentary for subscribers below »