Carl Swenlin and others have noted the presence of a 9-month cycle in the stock market. Unfortunately, the cycle can be erratic. It might behave perfectly for years, then unexpectedly invert, or disappear altogether. Also, the cycle peaks may behave very differently from the troughs.
If there were a 9-month cycle in the stock market, a 63 day Commodity Channel Index (CCI) would be an excellent tool to track it. Donald Lambert, inventor of the CCI, recommended using an indicator input of 1/3 of the cycle length. 63 business days equals 1/3 of the length of an alleged 9-month cycle.
The chart above shows that the 63-day CCI has adhered to a perfect upward sloping trendline since last May. But that trendline has been broken in the last couple of trading days, after forming a bearish divergence with price; now the index appears to be poised to close below +100. This could be a powerful sell signal.
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