The Bulls Have It

Stocks formed a swing low and delivered a convincing 2.15% rally on Tuesday which indicates me that day 40 hosted the daily cycle low.

I had a concern about that the 764 million Selling on Strength that printed on Friday indicated that an undercut low was in the cards. While we still need to see a close above the 10 day MA to signal a new daily cycle, the strength of Tuesday’s rally convinces that day 40 was the DCL. And with such a strong thrust that I suspect that Thursday also marks the ICL.

The McCellan Oscillator closed above the 50 day MA on Tuesday. This is similar to the type of thrust that was demonstrated during the last 2 ICL’s.

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Stocks Still Seeking A Bottom

After the waterfall decline from last week, stocks are still seeking out their daily cycle low.

Stocks printed their lowest point on Thursday, day 40, placing them in their timing band for a DCL. So if a swing low forms, it would signal a DCL. However, I think that stocks are still seeking out its DCL.

The first reason is the 764 million Selling on Strength number that printed on Friday. If Thursday was the DCL then stocks should not be printing such a huge SOS number so soon afterwards.

The second reason is that stocks lost the 200 day MA (again) on Monday. I think that losing the 200 day MA on Monday sets stocks up for an undercut of the day 40 low. That should get everybody bearish and on side of the wrong side of the boat. So once the DCL low forms, bulls will be to afraid to pull the trigger setting up stocks to continue to rally into a wall of worry.

The 10/12/18 Weekend Report Preview

The Dollar

The bearish reversal on Tuesday followed by closing below the 50 day MA on Thursday confirms the daily cycle decline.

The dollar peaked on day 12 and printed its lowest point on Wednesday, day 15. Since 25 out of the last 30 daily cycles stretched 24 days or longer, a peak on day 12 can still result in a left translated daily cycle formation. The dollar still needs to turn the 10 day MA lower before we can expect a DCL to form. Currently the dollar is in a daily uptrend. A close below the lower daily cycle band will end the daily uptrend and begin a daily downtrend.

Stocks

Stocks printed their lowest point on Thursday, day 40. That places stocks in their timing band for a DCL.

Stocks printed an inside day on Friday, closing above the 200 day MA. Stocks will need to break above 2795.14 in order to form a swing low to signal a new daily cycle. However, the 764 million Selling on Strength that printed on Friday suggests that the bottom is not yet in. If Thursday was the DCL then stocks should not be printing large SOS days …

Stocks have begun to close below the lower daily cycle band which ends the daily uptrend and begins a daily downtrend.

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Also included in the Weekend Report is the Likesmoney CycleTracker

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Gold Recognition Day

Boom!

Gold rallied on Thursday, which I believe was a Recognition Day. Gold sliced through the declining 50 day MA to close above the upper daily cycle band in a clear and convincing manner indicating an end to the daily downtrend and the start of a new daily uptrend. This reminds me of the Natgas Recognition day we discussed back on 9/18.

The similarities include:
* Recent cycle low
* A test of the 50 day MA
* A slight retrace from the 50 day MA
* Boom
* Then the ensuing rally

Bearish Drop

Stocks plunged, dropping 3.29 % on Wednesday.

At 39 days. stocks are in their timing band to print a daily cycle low. The bigger picture is that stocks are on week 35 for their intermediate cycle. Placing stocks very deep in their timing band to print an intermediate cycle low. Stocks probably will need several more days to exhaust the selling. And once stocks do form a daily cycle low, the odds favor that it will also form an intermediate cycle low. And the intermediate cycle low represents one of the best times of the year to go long. And since the current intermediate cycle is right translated that favors the new intermediate cycle continuing the pattern of higher highs.

Seeking a Gold Bottom

Gold printed its lowest point back on August 16th. Which I believe to be an intermediate cycle low, however gold has not yet confirmed this.

Gold has been in a narrow range consolidation since the 8/16 Low. This bottoming process has been characterized by volatility surrounding the 10 day MA while gold has been contained by the declining 50 day MA. This has been frustrating for both bulls and bears as gold has been whipsawing back and forth. Which reminds me of the 2015-2016 bottoming process for gold.

The 2015 – 2016 bottoming process also was characterized by volatility surrounding the 10 day MA while gold kept below the 50 day MA, until 3 things happened.

First gold crossed above the 50 day MA to close above the upper daily cycle band. This was the first signal that gold ended its daily downtrend.

Second gold back tested the 50 day MA.

Third gold formed a swing low and closed back above the upper daily cycle band. Since the swing low formed above the lower daily cycle band, that triggered a cycle band buy signal. Then gold closing back above the upper daily cycle band confirmed a new daily uptrend.

Once the new daily uptrend was confirmed, gold began to rally.

Miner Rally

The Miners closed higher on Monday.

The Miners ran into resistance at the declining 50 day MA last Wednesday. They drifted lower until closing for a gain on Monday. At 19 days, that does place the Miners in the early part of their timing band for a daily cycle low. But since 15 out of the previous 18 daily cycles stretched past 19 days if a swing low forms off of Monday’s bullish reversal, we will label Monday as a half cycle low.

The 10/05/18 Weekend Report Preview

The Dollar

The dollar formed a daily swing high on Friday.

The dollar formed in intermediate cycle low in September. Typically the first daily cycle for a new intermediate cycle forms as a right translated daily cycle. Friday’s swing high is a signal that this daily cycle could left translate. I believe that the 200 week MA is providing resistance that caused the daily swing high on Friday.

Stocks

Stocks closed below the 10 day MA on Thursday and delivered bearish follow through on Friday to confirm the daily cycle decline.

The peak on day 26 locks in a right translated daily cycle formation. Friday was day 36, placing stocks in their timing band for a DCL. A break above 2909.64 forms a swing low to signal a new daily cycle. Stocks are in a daily uptrend. If a swing low forms above the lower daily cycle band that will indicate that stocks remain in their daily uptrend and trigger a cycle band buy signal.

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

Stocks Break Lower

On Monday we discussed that stocks printed a swing low, possibly forming a very mild DCL.

That all changed on Thursday.

Stocks never did break above the day 26 peak. Then stocks broke decisively lower on Thursday, breaking below the day 29 low. Stocks also closed below the 10 day MA, turning it lower. This combined with the fact that the Nasdaq, the Russell and the Transports all printed lower lows on Thursday indicates that today was day 35 for the daily equity cycle.

However, stocks began to recover into the close, leaving behind a long lower shadow. That suggests to me Fed intervention, preventing any bearish momentum from developing. Stocks have been in a daily uptrend. Since stocks have not closed below the lower daily cycle band they remain in their daily uptrend. So if a swing low forms above the lower daily cycle band that would trigger a cycle band buy signal.

Miner Outlook

Gold formed a swing low on Tuesday.

Gold printed its lowest point on Friday, day 30, placing gold in its timing and for a DCL. Tuesday’s swing low saw gold close above the 10 day MA, causing it to turn higher to signal that day 30 was the DCL. Due to the proximity of the 50 day MA, we would like to see a close above the declining 50 day MA to confirm the new daily cycle. And if a new daily cycle is confirmed that would mean that gold printed a higher low — the beginnings of a new uptrend.

The Miners did signal a new uptrend on Tuesday.

The Miners printed their DCL in mid September, which I believe was also the ICL. On Tuesday they closed above the upper daily cycle band. Closing above the upper daily cycle band ends the daily downtrend and indicates a new daily uptrend.

I believe that both gold and the Miners are sniffing out a potential top in the dollar. I plan to cover all of the short term and longer term cycles for the dollar in the Weekend Report.