 Welcome back folks to Dow. Dow Industries right now trading up about 185. We get the Nasdaq of 179. S&P's are up 23 Let's go over to our man, Mr. Steve Rhodes and kick this new year off the right way And don't forget folks every trading day you can listen to Steve one to two eastern standard time outstanding show You also have a great newsletter mastering probability now It's very easy to get the newsletter folks over our website at TFNN You're gonna go into newsletters. You're gonna see it right on the top row on the right-hand side You just hit subscribe you can get Steve's newsletter for $149 for one month You get it for 695 for six months, which is a savings of $199 at 22 percent And you can get it for the full year for 1195, which is a savings of $593 of 33 percent bottom line folks do yourself a favor get over there get it you enjoy it You'll end up paying for it Something doesn't work for you guess what you get the money back you have everything to win zero to lose Steve Rhodes, happy new year Happy new year. Do you how do we get to 2022 so quickly? Oh, baby, man, it's scary. It's scary It's there's no doubt. There's no doubt what a crazy New Year's really crazy Christmas New Year's season Yeah, just was just was so I don't know, you know, it's got to be the same way I so I spent quite a bit of time traveling between Naples Orlando and obviously Delray Beach and every time I drove past a testing center lines were like miles long, right? You know, just just a just a crazy. Yeah, we ended up we ended up changing our plans You know with with the great football that was on on New Year's Eve and everything. We're like, well, we'll just stay home Which which was not but in and I love this weekend specifically because you know If you love football between college football and the pros out there But by the time I got to last night the last game I was kind of like, okay I've had too much football. I did the same thing man. I what happened last night. I'm saying to myself Okay, I think I best have something wrong with me because it started really in the morning folks And all of a sudden it's 11 o'clock at night. It was just and then I says, okay, man Yeah, you know, I don't know if you saw it But did you see Brady with that 97 yards and like two minutes? He had he had no timeouts 97 yards and two minutes folks and he won the game. It's like insane. This guy is just like over the top man I mean, well, I sent a text message to a good friend of mine We typically go down to the to the dolphins games. Yes, and we haven't the last couple but I said to him You know, maybe we ought to follow the playbook of Tampa Bay. Let's get rid of Tua and let's bring erin rogerson You know, let's let's bring the old guys in that know how to Yeah, that really know how to win Um, I mean there there's something to be said for what you guys have done over in Tampa for sure Oh, there's no doubt. We just get those. I mean if the defense holds up, man, we're gonna be there That's I mean, that's the bottom line, you know, pretty amazing. Absolutely. Yeah, absolutely. So what do we got out? Yes, Steve. Well, we're gonna start with just simply the seasonal cycle Uh, so over the last 86 years, we know that the Dow on average is topped out during the first week of January We look at an actual specific date that would be January 6th, which I believe is Thursday of this week So it doesn't always happen to the day But we're certainly in that cycle where we typically see Both a top during the first week of January that then leads to a pull back into the end of January And that's when typically we see a significant bottom for the entire year So I've always mentioned to folks that are contributing to their retirement plans Especially if they're looking at some type of tax deduction, don't wait until April 15th Wait until January 30th Or they're about to put that money in because there's a there's a good amount of movement between then typically And the April timeframe. So this is our seasonal cycle if we take a look at 2021 What we'll see is that the Dow topped on January 7th. So that's this little red arrow back here So following along with the seasonal cycle makes it bottom January 29th Look at that compared to And that seasonal cycle folks is put together a couple of years ago out here So either then the market went up made a top in May as it should pulls back into the summertime Low into June. And so the seasonal cycle really in 2021 worked very well So, um, let me just kind of get to to this set of charts here now the fall bottom Formed on September the 20th, which was a tad early typically that's around the April or I'm sorry the uh middle of October So this year it happened to be around September 20th So what what I do know is that certainly for 2021 the seasonal cycle worked very well We're going to continue to follow this tom into 2022 But my real question is will 2022 usher in that same Normal seasonal cycle pattern and the reason that I asked that question Is because if we take a look at and you and I we talked about this maybe a couple of weeks ago If we take a look at the annual charts the yearly charts for most of the u.s Indices what we're going to see out here is that most of these form what I refer to as a td9 count top That's a tom de marca tool out here It requires nine consecutive closes where each close of the current candle session is above the close For bars earlier. So in this case here, we're looking at the current bar versus for bars earlier And it's kind of like running a marathon or like running it maybe you're in a marathon But it's like running the sprint and you just simply run out of gas by giving it all that energy So the dow has a td9 count top the s and p has a td9 count top the russell the semiconductor index The nasdaq composite the new york stock exchange. So all of this just suggests extreme caution because of these yearly Because of these yearly td9 count tops another reason I believe that we should be cautious is that we have Volatility that has been rising for quite some time and it realizes till I started working on this chart over the weekend If we go back now, this is a weekly time frame chart tom that we're looking at for those five volatility index If we go back to the high that the top that took place in 2007 We can see that there was I'm just looking at the yellow diagonal line that we had rising volatility Now that's typically what we'll see when we see some kind of a Retracement some type of a pullback some type of a short term or a long term top out here Well, take us back into the 2018 time period we can see that And this is just on a closing basis that we have that same rising bottoms Pattern inside the spot volatility So this makes the hair on the bed if I had any hair on the back of my neck really kind of stand up here So it says caution this little purple rectangular box Shows for the most part the period of time over on the left where the spot volatility index was above its 50 period exponents moving average since this is a weekly chart it would be a 50 week Exponential moving average and once price is above that red line right now. That's about 1979 Things can get rocking and rolling to the downside. So we have a pattern that is very similar to what we saw back in 2007 That's in place right now. And so that says another reason to be concerned out here So the one conclusion that I will draw whether this is going to be a significant top or not Is that volatility is going to continue to rise and that's something that I think your ears love to hear Because what that means is we likely have a at least a two-way market. Yes If we have a one-way market, there'll be one way to the downside when price exceeds some of these levels out here But otherwise we have rising volatility and that says really good for traders out there So I think that's a real important chart now if the markets do make a top this week Then the question becomes what levels do we look at? Well inside the es mini. It's very easy Just take a look at the right hand panel chart out here that number is going to be 44 96 50 during the entire year of 2021 All of the pullbacks found support at the bottom of these weekly profiles So if we get a close below the bottom one of these weekly profiles in the es mini again 44 96 that's going to really suggest to you and I or at least to me that the markets are going to head lower And probably for longer than shorter meaning at least a year out there So we've got lots of reasons to be very cautious this week. Maybe very telling We'll certainly keep an eye on that 44 96 50 level and Um, that's what I see as we take a look at the markets out here. You gotta love it And folks, it's really easy to get steve's newsletter. Just come over to our website at tf And you hit newsletters on the right hand side and it's pretty amazing steve how These profiles can keep you long, huh? It is it's you know, it's it's nice to have a valuable tool like that It really is and tell me I thank you for that because I didn't know about profiles And until you brought the guys from taz on absolutely listen, man You have a great one safe one. We look forward to show tomorrow. Thanks. Thank you stay right there folks to come right back