Chart Projection for 2016

I tend to write in flurries, so you'll need to review my previous post for context. Using that historical analysis calling for SPX 1075-1550 in June-November 2016 with a likely bulls-eye of 1150-1250 in Oct/Nov 2016, I have drawn a potential price path thru 2016.

Based on Woods' cycle work, recent seasonality, the June-November target and the 2007-2009 analogy, I projected a significant low in Jan/Feb, June/July and Oct/Nov 2016. January and June/July have both witnessed significant drops in 5 of the last 8 years despite the overall rise. And, October has seen a significant drop in 4 of the last 8 years while also having an historic reputation with Oct/Nov including the next presidential election and maximum target month.

Also, the current potential bear market has followed the timing pattern of 2007-2009. In 2007, there was a high in May followed by a slightly higher high in July. In 2015, there was a high in May followed by a slightly lower high in July. In 2007 and 2015, there was a significant low in August. In 2007, there was a high in mid October while in 2015 the high is November 3rd thus far. The time for the August-October 2007 rally nearly matches to the day the August-November 2015 rally. In 2008, there were significant lows in Jan/Mar, July and Oct/Nov. I expect 2016 to be analogous since it fits the overall timing of our historical samples, Woods' cycles and it fits 2 of my parabolas very well (the new exponentially faster parabola from SPX 2116 or the year 2007 parabola repeated from SPX 2133 in July.

Although there are lots of reasons I have posted for SPX to bounce from the 1700-1750 area and I projected that in January on the chart, I also think wave proportionality, Fibs and the December rate decision could certainly push SPX lower near the old 1576 high and a trend line. So, I charted that projection as well.

Regardless, my main intent with the chart is to highlight the likelihood of 1750ish, 1600ish and 1150-1350 as likely key support areas for drops into the likeliest months of Jan/Feb, Jun/Jul and Oct/Nov 2016. Since I am expecting one more rally once SPX completes a short-term bottom at 2000-2040 in the next few days and a bounce to at least the 2050s max option pain region, I do see the possibility for one more high above 2116, but I don't think SPX will make it that far. My suspicion is that the market will generally be punished into the Dec 15-16 Fed meeting in anticipation of a rate hike, but as typical, I also expect the market to consolidate or rally into the Fed meeting and Dec 18 OPEX and reverse its general direction after the Fed meeting which would lead to a post-Fed rally possibly because they didn't raise rates or because they only raised them 1/8th or because they say they will consider lowering rates back if necessary or whatever excuse is needed for a Santa Claus rally. But I then expect the wheels to really come off in January. Good fortune.