Sand Spring Advisors LLC

4-Year Cycle To Bottom with pi Cycle in Fall

January 30, 2006

by, Barclay T. Leib

A Sandspring.com reader recently pointed out to us the above 4-year low-to-low cycle (as originally presented by www.DecisionPoint.com) that has been amazingly robust over the past two decades. This cycle currently points to an October 2006 equity market low -- which is consistent with our earlier espoused pi cycle view as detailed in our January 9th "Overall 2006 View" subscriber-only article.

In the short-term, of course, late January did not represent a cycle low as we had previously anticipated, but the bearish "Three Peaks & Domed House" formation discussed in our January 14th, 2006 article is still present.

We must thus suggest that the obvious rhythm that now presents itself is late January market strength leading to late March 2006 equity market lows (maybe somewhere near the March 29th solar eclipse); followed by a bounce period into mid-May to early June; followed by extreme weakness into mid-October 2006; followed by strength again into the more important 8.6-year pi cycle due in late February 2007.

Increasing equity market volatility should be a secular theme over this year, with 2007-2008 then becoming even more violent.