The 9/23/16 Weekend Report Preview

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The recent volatility has obscured our daily cycle count.

On Wednesday the dollar was rejected by the 200 day MA and closed below the 50 day MA that clearly signaled the daily cycle decline. Even though the dollar formed a swing low and closed higher on Friday, it did not regain the 10 day MA. At this point a close above the 50 day MA would signal that Thursday was day 24 and the daily cycle low.

Stocks
stocks

Stocks finally formed a swing low on Wednesday and closed above the upper daily cycle band on Thursday to confirm that day 53 hosted the daily cycle low

Stocks did form a daily swing high on Friday to back-filled the gap that was left behind on Thursday. Stocks are emerging from a right translated daily cycle low. Stocks should go on to print a higher daily cycle high.

Stocks Deliver Bullish Follow Through

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Stocks delivered bullish follow through on Thursday.

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Stocks printed their lowest point point on 9/12 following the mid-August peak. September 12th was day 53, placing stocks deep in their timing band for a daily cycle low. Stocks finally formed a swing low on Wednesday signaling a new daily cycle. Closing above the upper daily cycle band confirms that Thursday was day 8 of the new daily cycle.

While it is clear that stocks are in a new daily cycle, the daily cycle count for the dollar is unclear.

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The dollar printed an extended 39 day daily cycle low in August. That extended daily cycle count is part of the rationale that day 14 hosted a shortened daily cycle low. If day 14 hosted a shortened daily cycle low then that makes Thursday day 10. Which leaves 2 – 3 more weeks before the next daily cycle low is due.

The other possibility is that Thursday was day 24. A day 24 scenario makes this a bullish scenario for the dollar with the dollar peaking on day 23. That would form an extremely right translated cycle formation. That would also place the dollar in its timing band for a daily cycle low. Then a break above 95.49 forms a daily swing low and signals a new daily cycle.

However a close below the lower daily cycle band would also shift the odds toward a left translated daily cycle formation and indicate that the dollar is in its intermediate cycle decline.

Holding Pattern

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Stocks and the dollar both appear to be in a holding pattern while waiting on the results of of the FOMC meeting.

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Beginning with the dollar: The dollar did manage to regain the 50 day MA on Tuesday but is still being contained by the 200 day MA. We discussed on Monday how I was reluctant to label day 14 as a daily cycle low until we see how the dollar negotiates the 200 day MA.

If day 14 was not a daily cycle low that would make Tuesday day 22. And I do not believe that the dollar would be able to close above such a major movie average like the 200 MA so late in the cycle if Tuesday was day 22. So a close above the 200 day MA makes it likely that Tuesday was day 8 of a new daily cycle.

Rejection by the 200 day MA would send the dollar into its final daily cycle decline and allow for the possibility that Tuesday was day 22.

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Ever since stocks printed their lowest point on day 53, they have been churning sideways. Day 53 already places stocks late in their timing band for a daily cycle low. Stocks still need to break above 2163.30 in order to form a daily swing low. However, it is still possible for stocks to break lower after the FOMC’s statement on Wednesday. If that were to happen then any break lower would likely be short lived due to the lateness of the current daily cycle. But barring a break lower, stocks need to break above the day 53 low of 6163.30 in order to form a daily swing low to signal the start of a new daily cycle.

Decision Time for the Dollar

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The dollar rally strongly on Friday to close above the 50 day MA and test the 200 day MA. The dollar then retreated on Monday closing back below the 50 day MA. Now it is decision time for the dollar.

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We discussed in the Weekend Report my reluctance to label day 14 as a daily cycle low until we see what happens with the 200 day MA. If the dollar is in an intermediate decline then it should be rejected by the 200 MA and roll over to complete its daily cycle decline. However, a close above the 200 MA would provide further evidence for an early 14 day, daily cycle low.

Stocks have yet to deliver conclusive evidence that it has started a new daily cycle.

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Stocks printed its lowest point last Monday following the day 34 cycle peak. While 53 days does place stocks late in their timing band to print a daily cycle low, stocks could still go lower. Stocks need to form a daily swing low and regain the 10 day MA to signal a new daily cycle. A break above 2163.30 forms a daily swing low.

The 9/16/16 Weekend Report Preview

The Dollar
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The dollar’s daily cycle peaked on day 9 and then printed its lowest point on day 14, which is early for a daily cycle low.

The declining trend line break and Friday’s close above the upper daily cycle band both indicate that day 14 hosted an early daily cycle low. I am reluctant to label day 14 as a daily cycle low until we see what happens with the 200 day MA. A close above the 200 MA would provide further evidence for an early daily cycle low. But if the dollar is firmly rejected by the 200 MA then we would need to consider that Friday was day 20.

Stocks
stocks

Stocks printed their lowest point on Monday, day 53, following the day 34 peak. That places stocks deep in their timing band to print a daily cycle low.

Stocks still could spike lower. But being so late in the daily cycle timing band any break lower should be recovered quickly. Currently a break above Monday’s high 2163.30 will form a daily swing low to signal a new daily cycle.

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Also included in the Weekend Report is the Likesmoney CycleTracker

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Equity Cycle Low is Nigh

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Stocks printed their lowest point on Monday following the day 34 peak. Monday was day 53 for the daily equity cycle. That places stocks late in their timing band to print a daily cycle low.

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Even though stocks closed lower on Tuesday and Wednesday, stocks did not break below Monday’s low. With a strong bullish divergence that is developing on the True strength Indicator along with stocks being late in their timing band for a daily cycle low makes it look as if Monday hosted the daily cycle low. A break above 2163.30 will form a daily swing low to signal a new daily cycle.

The NASDAQ Composite has already formed a daily swing low.

The NASDAQ also printed its lowest point on Monday following its daily cycle peak. After consolidating Tuesday and Wednesday the NAS broke higher on Thursday to form a daily swing low which signals a new daily cycle. The NAS also managed to close above the upper daily cycle band. This indicates that the NASDAQ is re-estblishing its daily uptrend and is leading stocks out of their daily cycle correction.

Volatility Continues

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Stocks were lower on Tuesday, continuing stocks recent round of volatility.

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Even though stocks dropped close to 1.5% on Tuesday, stocks did not print a lower low. Which means that a break above Monday’s high 2163.30 forms a daily swing low. And with stocks so late in their timing band a swing low should signal a new daily cycle. The 593 million Buying on Weakness that printed today also signals that the bottom is near. Still, stocks could break lower. If stocks do break lower, it would probably be short lived and represent a buying opportunity.

Late in the Timing Band

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Stocks printed their lowest point on Monday following the day 34 peak. Monday was day 53 for the daily equity cycle. That places stocks late in their timing band to print a daily cycle low.

spx

Stocks nearly recovered all of Friday’s drop. Closing near the highs of the day also has eased the parameters for forming a daily swing low. A break above 2163.30 will form a daily swing low. Then a close above the 10 day MA should allow us to label Monday as the daily cycle low.

spx weekly

Stocks did close below the lower daily cycle band on Friday, indicating an end to the daily uptrend. But since stocks have not closed below the lower weekly cycle band they still remain in a weekly uptrend. Stocks will continue in their weekly uptrend unless they close below the lower weekly cycle band.

The 9/09/16 Weekend Report

The Dollar
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The dollar began the week being decisively rejected by the 50 day MA. However, the swing low that formed on Friday sets up a possible early daily cycle low.

Friday was likely day 15 for the dollar’s daily cycle. But a break of the declining trend line would signal that the dollar has begun a new daily cycle. However, if the dollar continues lower and breaks below the previous cycle low of 94.05 it will form a failed daily cycle and confirm the continuation to its intermediate cycle decline.

Stocks
stocks

Stocks have not delivered a clearly identifiable daily cycle decline since peaking on day 34, until Friday.

Day 47 did place stocks late in their timing band for a daily cycle low. Then stocks did not break above the day 34 high of 2193.81 to confirm a new daily cycle. So Friday’s break lower signals a continuation of the daily cycle decline. And 52 days places stocks very late in its timing band for a daily cycle low.

The late daily cycle count indicates that this daily cycle decline will be short-lived. And as big of the drop was on Friday I will remind everyone that stocks delivered an even bigger drop back in June. The break for consolidation should yield a trending move. The current daily cycle decline will allow for everyone to “get on the wrong side of the boat”. That will set up a false break down out of the consolidation. Since the current daily cycle has formed as a right translated cycle, the new daily cycle should break out to new highs.

The entire Weekend Report can be found at Likesmoney Subscription Services

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

For subscribers click here.

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

Energy Update

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NATGAS appears to have left behind a daily cycle low.

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NATGAS printed its lowest point on Wednesday following the day 10 peak. Wednesday was day 17 for its daily cycle, which places NATGAS on the early end of its timing band for a daily cycle low. NATGAS formed a swing low, gaining a big 4.86% on the day. A break of the declining trend line will signal a new daily cycle.

You will notice that NATGAS closed above the upper daily cycle band as it rallied into its day 10 peak. During the decline, NATGAS managed to hold above the lower daily cycle band. Now a close back above the upper daily cycle band signals that NATGAS has re-established its daily uptrend.

Oil also had some bullish developments on Thursday.

oil

Since 21 days is too early to expect a daily cycle low to form, I expected oil to be rejected by either the 10 day MA or the declining trend line and then complete its daily cycle decline. Setting aside the early 21 day cycle count, oil is behaving as if it is rallying out of a daily cycle low.

The daily oil cycle peaked on day 12 and then printed its lowest point last week on day 21. Oil has since formed a daily swing low and regained the 50 day MA. Then, not only did oil regain the 10 day MA on Thursday, it also broke above the declining trend line and managed to close above the upper daily cycle band. The close back above the upper daily cycle band indicates that this is a new daily cycle.

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I still have some concerns that day 21 is too early for the daily cycle low. However, looking at the fib retracement we can see that oil retraced a full 61.8% on this recent decline. So unless oil does something to make me think differently, like closing back below the upper daily cycle band, I will label day 21 as an early daily cycle low.