The 11/21/14 Weekend Report Preview

The Dollar
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The daily cycle count remains unclear.

1 $$$ dailyhttp://postimg.org/image/4f15zdp71/

The dollar broke out to a new high on Friday possibly extending the daily cycle out to day 27. I think that it is more likely that the daily cycle peaked on day 22. The dollar has been so incredibly bullish that I think that the low that formed on day 23 was a stealth daily cycle low. The new high on Friday formed off the day 23 low signals a new daily cycle.

Left translated dollar cycles typically peak by day 8. The swing low formed on Friday, day 4, signaled a new daily cycle. If our cycle count is accurate then we should see the dollar top soon and then decline into a failed daily cycle.

Stocks
stockshttp://postimg.org/image/69wujdu9x/

The daily equity cycle broke out to a new all time high on Friday, which was day 27.

http://imageshack.com/a/img537/1905/zRYR9r.jpg

Currently a total of 3.56 billion Selling on Strength has printed. This is the type of number we can expect to see at an intermediate cycle top.

Recall how we had a similar Buying on Weakness number leading into the last cycle low.

http://imageshack.com/a/img905/6418/WxSoS1.jpg

The above chart shows how the BOW numbers accumulated as stocks declined into their recent cycle low. The 4.019 billion BOW number was a huge number that signaled an intermediate cycle low.

A new high on day 27 assures us that this daily cycle will form as a right translated cycle. Which means we can expect the next daily cycle to go on to print a higher daily cycle high.

The SOS numbers seems to be at odds with our cyclical expectation of the next daily cycle printing a higher daily cycle high. I think that after the decline into the impending daily cycle low we will see stocks quickly set a new higher high. After a new higher high we will see stocks roll over into a left translated cycle, daily cycle decline that will lead into an intermediate cycle decline.

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Déjà vu, again …

00http://postimg.org/image/ez0t7hx01/

Bonds printed the huge bearish reversal on October 15th. Six days later bonds broke below the 120 level and have been trading in a tight 2 point range since.

TLT Sharp Charts Workbench Stock Charts com 20http://postimg.org/image/sfokyrxqj/

It is now day 16, Bonds are just 2 days shy of its timing band for a daily cycle low. With each passing day I believe that the gravitational pull of the impending daily cycle low makes it likely that we will see a bearish break out of this consolidation. A break below 118.13 produces a failed daily cycle confirming that bonds are in an intermediate cycle decline.

The dollar has also been trading in a tight range for over two weeks now.

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The dollar has performed a masterful job obscuring its daily cycle count. My best guess is that day 22 is the daily cycle peak. It remains to be seen if day 23 is the daily cycle low.

If the dollar breaks above the day 22 high of 88.37 then I would be inclined to label day 23 as the daily cycle low. A clear and convincing break below the day 23 low of 87.23 will force us to label day 18 as the daily cycle low. (Which was something that we considered here).

Last night we discussed that gold may be allowing the 10 day MA to catch up before breaking through the declining 50 day MA

gold

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Gold began the day by breaking lower. Gold went on to tag the 10 day moving average and then recovered and closed higher for the day. Today was day 10 for gold’s daily cycle. Gold’s daily cycle still remains bullish. I think that gold is waiting on the dollar to begin its final decline into its daily cycle low to make a break higher. A close above the declining 50 day MA would be very bullish and would signal that gold is in a new intermediate cycle.

The 11/19/14 Update

Just a quick update tonight

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The daily cycle count is unclear. My best guess is that day 22 is the daily cycle peak. It remains to be seen if day 23 is the daily cycle low.

goldhttp://postimg.org/image/884ceruxp/

As we discussed last night that the dollar is overdue to begin an intermediate cycle decline. That should help gold. Currently we see gold stalling at the declining 50 day MA. Gold may be allowing the 10 day MA to catch up before breaking through the declining 50 day MA.

Clear & Convincing

ohttp://postimg.org/image/m3ks6xkln/

We discussed last night how the Miners have confirmed a new daily cycle. Tonight we are going to look at how they are doing on the weekly cycle.

gdx weeklyhttp://postimg.org/image/x71824ll9/

The intermediate Miner cycle peaked in early July on week 6. It had a bearish break out of consolidation in early July and then dropped for 10 weeks into its intermediate and yearly cycle low. A bullish weekly reversal printed the 1st week of November. Last week the Miners formed a weekly swing low, indicating that the intermediate cycle low has been left behind. While still early in the week the Miners have already rallied for 6.73% delivering a clear and convincing break of the declining weekly trend line confirming a new intermediate cycle.

And I believe that there is reason to believe that this intermediate cycle will continue to rally.

weekly $$$http://postimg.org/image/4u4b8burv/

The Miners historically tank as the dollar rallies and rallies on any dollar weakness. The dollar is getting very late in its timing band to decline into an intermediate cycle low. During the past 3 weeks the dollar has been trading in a narrow range as it goes through a topping process. During that time the Miners have already rallied over 17%. And I believe that as the dollar finally declines into its impending intermediate cycle low the Miners are really going to catch fire.

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Deciphering the Dollar

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The dollar is still doing a masterful job hiding its intentions.

The dollar first peaked on day 17. The swing high breached the accelerated (dashed) blue trend line making it look like, in real time, that the dollar just began its daily cycle decline. But there was no bearish follow through. The TSI was still trending lower and that also prevented us from labeling day 18 as a daily cycle low.

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While that could still be the correct scenario, I think that Friday marked the peak to the daily cycle. We may have just witnessed a 1 day decline. A break above Friday’s high of 88.37 will have us label today as a 23 day, right translated daily cycle low.

And if today was the daily cycle low, I suspect that we would see the dollar peak quickly and then roll over into an intermediate cycle decline.

The Miners have been acting bullishly.

GDX

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Last Wednesday we discussed here how the Miners were in a Danger Zone. But on Friday the Miners broke out of that danger zone by delivering a big 6.02% gain. That saw the Mines break above the declining trend line to confirm a new daily cycle. Today the Miners back tested the declining trend line and then delivered more bullish follow throughout.

If the Miners are emerging out of an intermediate cycle low then this daily cycle should form in a right translated manner. Which means we should see this rally extend past day 12. We can see three hurdles for them, the declining 50 day MA, the previous swing high of 22.16 and the 200 day MA.

Regaining the declining 50 day MA would certainly be a bullish development. WE could see the Miners crawl along the 50 MA for a few days before breaking through. Then,if the Miners go on to break above the previous high of 22.16 they will break the pattern of lower highs. If the Miners do rally up to the 200 MA, that would likely cap this daily cycle.

Golden Possibilities

00http://postimg.org/image/f8prlwyzt/

The day following lowest point of the cycle decline is day 1 of a new daily cycle low. Even though the previous Friday saw gold print its lowest point of the cycle decline, gold also delivered a powerful 3.28% day that forced us to label it day 1 of a new daily cycle.

31 gold dailyhttp://postimg.org/image/r053alhi5/

Gold needed most of this week to consolidate the big day 1 rally that printed on 11/7/14. Gold consoldiated through Thursday. Then on Friday gold delivered a powerful follow through day. Gold rallied 2.25% on Friday, formed a swing low and closed above the declining trend line to confirm a new daily cycle.

Gold is also developing bullishly on its weekly and monthly charts. In the Weekend Report we look at gold’s intermediate and yearly cycles. We discuss where gold is in its weekly and yearly timing bands for cycle lows.

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The 11/14/14 Weekend Report Preview

The Dollar
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The bearish reversal and swing low printed last Friday and Monday respectively looked in real time as if the dollar began its daily cycle decline. However, there was no bearish follow through.

http://imageshack.com/a/img537/8546/vRo3Hq.jpg

The dollar broke to a new daily cycle high on Friday, then reversed lower. Friday was day 22 for the dollar’s daily cycle. The dollar is already in its timing band to print a daily cycle low. After a brief decline into a daily cycle low we can expect the new daily cycle to peak early and then roll over into an intermediate cycle decline.

Stocks
stockshttp://postimg.org/image/69wujdu9x/

Our normal cyclical expectation is to see the first daily cycle of a new intermediate cycle form in a right translated manner. The peak on Thursday, day 21, makes it likely that this daily cycle will form as a right translated cycle.

20 spx dailyhttp://postimg.org/image/v7db6cyen/

Friday was day 22 for the daily equity cycle. The timing band for a daily cycle low runs from day 30 to day 45 so there is plenty of time for stocks to make another push higher. But there are a few signals that indicate that the daily cycle decline is near.

The CCI delivered a bearish 100 line crossover. The TSI is about to deliver a bearish crossover, as well. Also the 3.384 billion in Selling on Strength indicate a correction is near.

A swing high accompanied by a trend line break will signal the daily cycle decline. Due to the way this daily cycle has formed there is not a clear trend line to use. So we will default to a close below the 10 day MA along with a swing high. A break below 2030.44 forms a daily swing high.

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Dollar Decision Time

0

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The daily dollar cycle peaked on Friday, day 17. A swing high and trend line break formed on Monday, day 18, to confirm the daily cycle decline. The dollar’s timing band for a daily cycle low begins on day 18. So the dollar could very well of printed a daily cycle low on Monday.

$$$1http://postimg.org/image/5nteus7ih/

Since the day 17 peak the dollar has been forming a mini triangle consolidation. I believe that a break of this consolidation will signal either a new daily cycle or a bearish continuation.

Stocks printed another higher high today.

$ SPX

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Thursday was day 21 for the daily equity cycle. A new high now virtually assures us of a right translated nature for this daily cycle. But as we saw with the previous daily cycle, even a right translated cycle can fail. And the large Selling on Strength numbers we have seen recently still suggest something sinister is afoot.

Danger Zone

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The Miners are in a danger zone.

gdxhttp://postimg.org/image/mdhru8bcb/

The Miners printed a daily cycle low last Wednesday, November 5th. A swing low formed the next day. While the Miners have delivered some bullish follow through, the Miners need a clear and convincing break above the declining trend line to break through this danger zone.

And even if the Miners break above the declining trend line there is one more critical area, the declining 50 MA. A break above the declining 50 MA signals a change in trend. Then a break above the previous daily cycle high of 22.16 forms breaks the pattern of lower highs.

Waiting to Cross the Line

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The dollar’s daily cycle peaked on Friday, day 17 by printing a bearish reversal. Monday the dollar printed a bullish reversal that formed a swing low, casting some uncertainty over the dollar’s intentions.

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The dollar did form a higher high before closing lower for the day, potentially setting the declining cycle trend line. Unless the declining trend line is breached, we can view Tuesday as day 19. A break above the declining trend line will signal a new daily cycle.

Meanwhile we are waiting on gold to cross one of two lines.

goldhttp://postimg.org/image/unumq5x39/

Gold had that powerful rally on Friday the posted a 3.28% gain. Since Friday gold has stalled. Gold needs to break above Friday’s high on 1179 to form a swing low. Then a break above the declining trend line confirms a new daily cycle.

A break below 1130.40 produces a failed daily cycle, stretching out the intermediate cycle decline.

We are also waiting on Bonds to cross a line.

tlthttp://postimg.org/image/4pr0k4rlx/

Since printing its lowest point on day 30 following the huge bearish reversal, bonds have been consolidating that reversal. The weekly bond cycle peaked on week 4 and is currently on week 8. Bonds are in the timing band to decline into a yearly cycle low. Bonds are in the process of forming a left translated intermediate cycle, which is in line with our expectation for a yearly cycle decline.

Therefore we can expect to see left translated daily cycles form. The current daily cycle peaked on day 1. A break to new highs would shift the likelihood for this daily cycle to form in a right translated manner. However, a break below the previous low of 118.42 forms a failed daily cycle and confirms the intermediate cycle decline.