Positive Review

000

Stocks gained on Yellen’s message.

2 spx

Today saw stocks break the developing declining trend line. Which causes us to reconsider if 4/11 was day 11 of a new daily cycle or day 46 of the previous daily cycle. A break above 1872.53 would provide a clear and convincing follow through to the break of the declining trend line.

The dollar still managed to close higher today after Reserve Chair Janet Yellen reaffirmed the central bank’s commitment to keeping interest rates low

11 $$$

The dollar is on day 4 in a new daily cycle that should see a high that exceeds the previous daily cycle high.

And as the dollar continues to rally, we should see gold continue into its intermediate cycle decline.

3 gold

Wednesday was day 11 for gold’s daily cycle. Gold has 7 more days before it encroaches on its timing band for a daily cycle low. The preceding daily cycle failed. And since this is still the same intermediate cycle, we expect this daily cycle to fail as well, which should include a panic sell off into its intermediate low.

Body Slammed

0

Gold got slammed in the overnight. At one point gold was down over 38 points before recovering a bit. But still gold ended down over 26 points for the day which was over 2%.

$ GOLD Sharp Charts Workbench Stock Charts com

Gold formed a clear and convincing swing high today and broke below the daily cycle trend line to confirm the daily cycle decline. With a day 9 peak, gold can trend lower for the next two to three weeks. Gold seems destined to print a second consecutive failed daily cycle.

Gold began its intermediate cycle decline on March 17th. Which was about when the dollar began its new intermediate cycle.

$ USD Sharp Charts Workbench Stock Charts com 2

The dollar printed its intermediate low on March 13th. It consolidated for a few days before rallying and when it did gold began its intermediate cycle decline. Now as the dollar is emerging out of its daily cycle low gold once again is caught in a cycle decline. This was day 3 for the dollar. Minimally since the dollar just printed a right translated cycle we expect to see the dollar print a higher daily cycle high. And as the dollar continues to rally we can expect to see gold tank.

Bag to the Mail Bag

mail

An email begins our discussion tonight.

“Know it is a long shot, but what are the chances that the equities are still in the first Daily Cycle?”

To begin I think that it is important to remember our framework. Stocks are on month 22 of the yearly cycle and are clearly overdue for the yearly cycle decline. A left translated weekly cycle is necessary for a yearly cycle decline. Left translated weekly cycle typically peak on or before week 8. So the first chart that I want to look at to address this will be the weekly equity chart.

spx weekly

The first thing we notice on the weekly chart is the bearish reversal on week 8. It is followed up by a clear and convincing weekly swing high which was accompanied by a weekly trend line break signaling an intermediate cycle decline. The hallmark of an intermediate cycle decline is a failed daily cycle.

So now we look at the daily equity chart.

spx

The swing high that follows the day 31 peak delivers a trend line break that leads to the day 35 low. The day 35 low hits right in the normal timing band for a daily cycle low. In order for Friday to be the daily cycle low, that would have stretched the daily cycle out to 46 days. While possible, I believe that it is a low probability event.

One reason is that the day 35 low does fit well in our equity overall framework. We are expecting a left translated weekly cycle. The 35 day low means that stocks are now in a failed daily cycle, which syncs up with what we discussed on the weekly chart.

The dollar rallying out of an intermediate low also ties into what we see happening with equities.

$ USD Sharp Charts Workbench Stock Charts com 2

Thursday was the lowest point following the day 16 peak. Friday was an inside day and Monday formed a clear and convincing swing low and trend line break to make today day 2 of the new daily dollar cycle. 20 days makes this previous cycle a right translated daily cycle. And by printing a higher daily cycle low, the dollar continues to emerge from the March intermediate cycle low.

And we usually do see stocks declining into an intermediate cycle low as the dollar emerges from an intermediate cycle low.

Free Image Hosting at www.ImageShack.us

We see above, every intermediate equity decline was accompanied by the dollar emerging out of an intermediate low. And it appears that the pattern is repeating again.

The 4/11/14 Weekend Report Preview

Free Image Hosting at www.ImageShack.us

The dollar’s daily cycle peaked a week ago Friday on day 16. A swing high formed on Monday and the dollar continued lower through out the week.

Free Image Hosting at www.ImageShack.us
http://yfrog.com/mwq0jvj

Thursday was lowest point since the day 16 peak, stopping just short of printing a failed daily cycle. The dollar printed an inside day on Friday, easing the parameters of forming a swing low. A break above 79.65 forms a swing low and a break of the declining trend line confirms a new daily cycle.

Free Image Hosting at www.ImageShack.us

Last week I commented here “generally speaking, surprises should confirm the trend. Meaning in an uptrend surprises should come to the upside and in a downtrend surprises should come to the downside. Stocks have been in an uptrend for the past 22 months. Friday‚Äôs print is a warning that this daily cycle can quickly develop into a failed daily cycle.”

Free Image Hosting at www.ImageShack.us
http://yfrog.com/e9jjrtj

Stocks went on to break below the day 35 low on Monday forming a failed daily cycle. A failed daily cycle signals an intermediate cycle decline. Stocks bounced off the 50 day MA on Tuesday and followed through higher on Wednesday. Thursday saw stocks reverse hard and giving up the gains from the previous two days and then some. In the process set the declining cycle trend line on Thursday. Friday saw stocks continue lower.

Friday was day 11 for the daily equity cycle. Since the timing band for a low begins on day 30, that gives stocks about another 4 weeks to trend lower.

The entire Weekend Report can be found at Likesmoney Subscription Services

The Weekend Report discusses Dollar, Stocks, Gold, Miners, The CRB Index, & Bonds in terms of daily, weekly and yearly cycles.
Also included in the Weekend Report is the Likesmoney CycleTracker

To subscribe: http://likesmoneysubscriptionservices.wordpress.com/

For subscribers: the full Weekend Report can be found at Likesmoney Subscription Services at http://likesmoney.wordpress.com/

You can email me at likesmoney@gmail.com to receive a sample copy of the Weekend Report

About Face

000

Yesterday it looked as if stocks were going to paint us into a corner and force us to shift the daily low label away from day 35 to Tuesday. But the about face printed today makes that not necessary.

$ SPX Sharp Charts Workbench Stock Charts com 2

Stocks printed a huge down day today, dropping over 2%. The big drop erased the previous two day’s gains and saw stocks close below the 50 MA.

Had stocks broke to new highs we would have been forced to move the daily cycle low label to Tuesday. Instead, todays reversal appears to have set the declining cycle trend line for stocks. And at 10 days, stocks still have another 20 days to enter their timing band for a daily cycle low.

While stocks gave us an about face, the dollar continued to march lower.

$ USD Sharp Charts Workbench Stock Charts com 2

Thursday was day 20 for the daily dollar cycle and the dollar printed another lower low. At 20 days, the dollar is in the timing band to print a daily cycle low. A failed daily cycle here would have us view this as an extend intermediate cycle, with this being week 24.

weekly $$$

A break below the weekly trend line would confirm an extended weekly cycle count.

GDX Sharp Charts Workbench Stock Charts com 20

Gold printed another higher high today, which was day 7 for gold’s daily cycle. However, the Miners did not take advantage of the weakness in the dollar.

The Miners tested the 50 MA and then pulled and about face and closed almost 2% lower today. Should the Miners continue lower and break below 24.50 they will form a swing high and likely mark the daily cycle peak. If that happens, that would continue a pattern of lower highs.

Painted into a Corner

Free Image Hosting at www.ImageShack.us

The dollar’s daily cycle peaked on day 16 and has since dropped like a rock.

Free Image Hosting at www.ImageShack.us

Normally a day 16 peak all but guarantees a right translated cycle. However, the dollar is just $0.31 away from printing a failed daily cycle. A failed daily cycle would paint us into a corner and force us to reevaluate things.

Free Image Hosting at www.ImageShack.us

In real time week 20 looks like an intermediate cycle low. But with the prospect of a failed daily cycle occurring at the tail end of a triangle consolidation makes this look like an extended weekly cycle is forming.

Stocks also appear to be trying to paint us into a corner.

Free Image Hosting at www.ImageShack.us

The day 35 pivot in real time does look like a daily cycle low. The corresponding break to new highs appeared to confirm a new daily cycle. The break to the low printed on Tuesday, April 8 looked as if an early failed daily cycle occurred. Which would have been day 8 of a new daily cycle.

However, the swing low formed today gives the appearance of a new daily cycle beginning. Since a new daily cycle cannot fail and then go on to print a new high, a break to new highs would make Tuesday the daily cycle low at day 43.

If it looks like a …

Free Image Hosting at www.ImageShack.us

Dollar Decline

000

The dollar formed a bearish reversal on Friday, day 16. A swing high formed on Monday and Tuesday saw a clear and convincing break of the daily cycle trend line to confirm the dollar has entered its daily cycle decline.

$$$ (10 Per Page) Members Stock Charts com 20

The dollar peaked on day 16, which locks in a right translation to this daily cycle. So once a low is formed our cyclical expectation is to see the dollar go on to print a higher daily cycle high. The caveat to that would be if this daily cycle fails, which would change the expectation to lower highs and lower lows.

$ USD weekly

If the dollar is going to avoid being drawn into a left translated intermediate cycle decline then it will need to find its footing immediately. The dollar is on the verge of losing the support at the weekly 200 MA. And if that happens then there would be little to stop the dollar from declining into an intermediate cycle low.

Gold continues to rally, closing above the 200 MA and pierced the 50 MA today.

$ GOLD Sharp Charts Workbench Stock Charts com

Gold still faces several hurdles if it is to print a right translate cycle. Today gold closed above the 200 MA and now has pierced the 50 MA. Gold will need to rally past the 50 MA and also break above the resistance at 1330 if it wants to avoid forming another left translated daily cycle.

One thing to keep in mind is that if gold is going to form a left translated daily cycle, then gold normally would peak by day 8. And there was 23 million printed today on the Selling on Strength. Of course the reason why we are keeping an open mind about this is that gold is only on week 14 of the intermediate cycle.

gold weekly

Gold’s weekly cycle peaked on week 11 and is now currently on week 14. It is still to early for the weekly timing band for an intermediate cycle low. With the daily cycle currently at day 5, it can easily go another 4 – 5 weeks. And if that daily cycle forms as a left translated cycle that would take the intermediate cycle out to weeks 19 or 20 which is right in the timing band for an intermediate cycle low.

The FAS Buy/Sell Indicator

00

One of the strengths of cycle analysis is identifying cycle bottoms. Identifying tops is a bit more challenging, depending if a cycle is forming as a left or right translated cycle. So I began looking for a way to help identify equity cycle tops. Through much trial and error I developed the FAS Buy/Sell Indicator.

I was quite pleased with how well this spotted equity cycle tops (daily, weekly) so I began tracking it. Strictly using the generated buy/sell signals delivered a high percentage of success. Once I decided to applied a stop loss, the success rate went higher.

I provide the FAS Buy/Sell Indicator to my subscribers as another tool in the tool box for equity studies.

Here are the charts posted on Thursday morning, Friday morning and over the weekend.

This is an end of the day signal. So we begin by looking at Wednesday’s equity chart.

1 spx 4 2

Stocks ended Wednesday with a gain.

The FAS Buy/Sell Indicator, which I normally post the following morning, gave a warning signal heading into Thursday.

1 fas

So stocks printed a higher high on Thursday.

2 spx 4 3

Based on Thursday’s print, the FAS Buy/Sell Indicator delivered a sell signal heading into Friday. And the sell Stop was raised.

fas

On Friday stocks managed to print a higher high before dropping.

3 spx 4 4
uploading pictures

The sell stop signal generated by the FAS Buy/Sell Indicator did its job. It helped to identify the equity cycle top and protected to the downside.

11 zfas

For this week I will offer a 1 month trial subscription of the Weekend Report.
$15 for one month allows you access to the entire Likesmoney Weekend Report Suite.

Included is the Weekend Report Suite:
My notebook on Miner Studies, Dollar Studies, Equities Studies, and Corn Studies
Also included is my proprietary FAS Buy/Sell Indicator and the Bullish Percent Index Bingo

Click here for to signup for a 1 month trial:

https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=9AJJZL94WUSBW

The 4/07/14 Evening Report

The dollar printed a bearish reversal on Friday. It followed up on Monday forming a swing high.

$ USD Sharp Charts Workbench Stock Charts com 2

The dollar is one day shy of entering its timing band for a daily cycle low. The swing high formed today may have just set the daily cycle high. The dollar stopped short of breaking the daily cycle trend line to confirm the daily cycle decline.

A close below the 50 MA should send the dollar into its daily cycle decline.

Contrary to expectations, the weakness in the dollar did not translate into strength in gold.

$ GOLD Sharp Charts Workbench Stock Charts com

Gold failed to capitalize on the dollar weakness today. With gold being so early in its daily cycle it should have the energy to break through the 50 MA. The fact that gold could not break through on the weak dollar might mean that gold is still caught in its intermediate cycle decline.

Platinum and Palladium also failed to take advantage of the weak dollar. And while technically there is nothing wrong with gold’s chart, there are some concerns with the following charts.

$ PLAT Sharp Charts Workbench Stock Charts com

Platinum formed a clear and convincing swing high and trend line break today.

$ PALL Sharp Charts Workbench Stock Charts com

Palladium also formed a clear and convincing swing high and trend line break. It also dropped for a whopping 3.26%

Getting back to the dollar. A day 16 peak locks in a right translated nature to the first daily dollar cycle. So after a decline we can expect to see to see the dollar break to a higher high. It seems as if the precious metals are already sniffing out another higher high for the dollar.

Divergent Behavior …

Free Image Hosting at www.ImageShack.us

The previous daily cycle formed as a right translated daily cycle. Last week saw stocks break out to new highs, fulfilling our cyclical expectations. However, stocks ended the week on a bearish note.

21 spx daily

The bearish reversal on Friday broke below the previous daily cycle high in a clear and convincing fashion. Stocks also printed a bearish TSI crossover. Now we are watching for either the TSI to break below the zero line or for stocks to break below the previous daily cycle low of 1842.11. Either event will signal that stocks have entered their daily cycle decline.

The NASDAQ had both occur on Friday.

20 NAS daily

While the S&P dropped 1.25% the NAS tanked for a whopping 2.6%. In the process the NAS delivered a bearish TSI zero line crossover and printed a failed daily cycle. It appears that the NAS is leading the way lower.

weekly nas

The NAS for the week was only down 0.67%. However the NAS had a bearish TSI zero line crossover last week. The last time the NAS had a bearish TSI zero line crossover on the weekly chart was well over a year ago. And when it happened the NAS lost over 12%.

weekly spx

So far the weekly S&P is holding up printing another higher high last week. However there is a bearish divergence that has been developing on the weekly TSI.

And as shown below, these bearish divergences on the weekly chart normally precede a correction.

divergent behavior

Makes me wonder if stocks are about to go over the edge …

o over