Miner Top

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The dollar came close to forming a daily swing low on Tuesday.

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Monday was the lowest point following the day 10 peak. At 38 days that places the dollar deep in its timing band for a daily cycle low. A break above 97.33 will form a swing low to signal a new daily cycle. And if the dollar is beginning a new daily cycle it may also be beginning a new intermediate cycle as well.

$$$ weekly

The is week 16 for the intermediate dollar cycle. The dollar printed a lower weekly low on Monday. Tuesday’s rally is causing the dollar to form a weekly bullish reversal, which will ease the parameters for forming a weekly swing low to signal a new intermediate cycle. And if the dollar is beginning a new intermediate cycle, then the first daily cycle should form as a right translated cycle rallying for 3 – 5 weeks or more. Which should send the Miners lower.

gdx

The 200 day MA stopped the previous 2 daily Miner cycles and appears to have done so again. The Miners broke lower on Tuesday, dropping over 2.3%. That caused the Miners to close below both the 50 day MA and the 10 day MA to signal that the Miners have begun their daily cycle decline. Tuesday was day 13 for the daily Miner cycle. The Miners daily cycle have been averaging 23 days over the past 12 daily cycles which makes it likely to see the Miners trend lower for the next 2 weeks and up to 3 to 5 more weeks if the dollar is beginning a new intermediate cycle. And a break below the previous daily cycle low of 20.89 will form another failed daily cycle

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The Dollar Breaks Lower

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The dollar broke lower on Monday, continuing its daily downtrend.

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The dollar’s daily cycle count is a bit unclear. Day 28 could have hosted a daily cycle low making Monday day 9 of a new daily cycle. But recently the dollar’s daily cycle has been stretching past day 30 days, which would make Monday day 38. There is also a bullish divergence that is developing on the True Strength Indicator that also supports this view. And 38 days would place the dollar deep in its timing band for printing a daily cycle low. At this point a swing low accompanied by a close above the 10 day MA will signal a new daily cycle. A break above 97.33 will form a swing low.

And if the dollar beings a new daily cycle, that could cause the Miners to print one more left translated daily cycle.

GDX

The daily Miner cycle peaked on day 9 then formed a swing high the next day. Monday was day 12 for the daily Miner cycle. The Miners would need to break above the day 9 high of 23.67 to shift the odds towards a right translated daily cycle formation. However, there was a large Selling on Strength number for GDX that indicates a possible turning point for the Miners. So if the Miners break lower then a peak on day 9 should still result in a left translated cycle formation. And a close below the 10 day MA will signal the daily cycle decline.

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* Copper
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The 5/19/17 Weekend Report Preview

The Dollar
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The dollar continued lower this week.

While Friday could be day 8, since 5 of the previous 7 dollar daily cycles stretched 30 days or longer makes it likely that Friday was day 37. That places the dollar deep in its timing band for a daily cycle low. At this point a swing low has good odds of marking the DCL, The dollar is in a daily downtrend and will continue in its downtrend until it closes above the upper daily cycle band.

Stocks
stocks

Stocks formed a swing low on Friday to indicate that Thursday hosted the daily cycle low.

A break of the declining trend line is normally used to confirm the new daily cycle. However the recovery on Thursday and Friday following Wednesday’s steep sell off does not allow for the construction of a declining trend line. Since stocks faded into the close on Friday, I would like to see a close above the upper daily cycle band before labeling Thursday as the daily cycle low.

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Possible Turning Points

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Following the big drop on Wednesday, stocks closed higher on Thursday.

spx

The daily equity cycle peaked on Tuesday, day 35, then dropped over 1.8% on Wednesday to close below the lower daily cycle band to confirm the daily cycle decline. While stocks printed a lower low, they did close higher on Thursday. At 37 days, stocks are in their timing band for a daily cycle low. The higher close helps to ease the parameters for forming a daily swing low. A break above 2375.74 forms a swing low to signal a new daily cycle. I would like to see a close back above the 50 day MA before we label day 37 as the daily cycle low.

Gold also reversed on Thursday.

gld

Thursday was day 7 for the daily gold cycle. While gold printed a higher high, gold closed lower on the day, easing the parameters for forming a daily swing high. A break below 1246.20 will form a daily swing high. A close below both the 200 MA and the 50 day MA would signal that the daily cycle decline has begun. Cycles usually print a left translated, failed daily cycle in order to complete its intermediate cycle decline. A peak on day 7 would indicate a left translated cycle formation signaling that gold is continuing with its intermediate cycle decline. Gold would need to break below the previous daily cycle low of 1214.30 to form a failed daily cycle.

Something’s Not Adding Up

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The dollar broke below the previous daily cycle low on Tuesday. This formed a failed daily cycle and continues the dollar’s intermediate cycle decline.

1 $$$ daily

Tuesday was day 7 for the dollar’s daily cycle. At 7 days, the dollar is not expected to print a daily cycle low for at least another 2 weeks. But since 2 of the previous 3 daily cycles stretched to 36 plus days, the dollar could trend lower for up to 4 plus more weeks.

The normal expectation if the dollar breaks below a previous low would be to see gold soaring, but so far that has not happened …

gld

Gold printed its lowest point last week on day 41, placing gold deep in its timing band to print a DCL. A swing low has formed and it appears that Tuesday was day 5 for the new daily cycle. The troubling thing is that despite the dollar dropping, gold has struggled to rally out of the day 41 low and has yet to break above the declining trend line to confirm that it is in a new daily cycle.

I think that gravitational pull from gold’s impending intermediate cycle decline is, in part, restraining this rally out of the day 41 low.

gld weekly

Gold printed its lowest point last week, which was week 21. That does place gold in the early part if its timing band for an intermediate cycle low. Since the previous 2 weekly cycles ran 26 and 28 weeks respectively, the weekly gold cycle could easily accommodate one more daily cycle before printing its intermediate cycle low. And since gold has yet to print a failed daily cycle, our expectation is to see this new daily cycle form as a left translated cycle and fail so gold can complete its intermediate cycle decline.

I have to say that the dollar forming a failed daily cycle on day 7 with 2 to 4 weeks before expecting a daily cycle low seems to be at odds with the expectation that the current daily gold cycle forms as a left translated cycle to complete gold’s intermediate cycle decline. My guess is that either the daily cycle count for the dollar is incorrect or gold did print an intermediate low on week 21.

Gold has formed a weekly swing low. If gold breaks above the declining weekly trend line then we will be forced to label week 21 as the ICL. But the other possibility is that the daily cycle count for the dollar may be incorrect.

SSS2

I believe that the dollar regaining the 200 MA and closing back above the lower daily cycle band after printing the day 28 low does signal that day 28 hosted the DCL. But we do need to acknowledge that 5 of the previous 7 dollar daily cycles stretched 30 days or more so Tuesday being day 34 would align with that scenario. So if the dollar prints a DCL over the next few days that be the trigger for gold to complete is intermediate cycle decline.

Taking a Look at Stocks

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Stocks broke out to a new high on Monday. So let’s take a closer look at both the daily and weekly cycles.

spx

Stocks peaked on day 30. Stocks then formed a swing high and broke clearly below the daily cycle trend line to print its lowest point on Thursday, day 32. That placed stocks in the early part of their timing band for a daily cycle low. Normally a daily cycle decline lasts 7 to 15 days which causes the RSI to become oversold. But with stocks in a daily and weekly uptrend, this may be all the correction we will see for the daily cycle decline. Therefore we will label Monday day 2 for the new daily cycle.

spx weekly

The weekly cycle peaked on week 17 and then printed its lowest point on week 21. That does place stocks in their timing band for an intermediate cycle low. But week 21 lacks 2 key things that normally accompany an intermediate cycle low.

The first thing is that stocks did not print a failed daily cycle as it declined into the week 21 low. The other missing criteria is that the weekly RSI did not get oversold. Normally a decline into an intermediate cycle low sees the weekly RSI become oversold. There is one more troubling thing about labeling week 21 as an ICL and that is the bearish divergences developing on the oscillators. Stocks are at an all time high but the bearish divergences suggests that decline into the ICL still needs to occur. So unless I see compelling evidence develop I will label this week as week 28 for the intermediate equity cycle.

The 5/12/17 Weekend Report Preview

The Dollar
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After peaking on day 10, the dollar printed its lowest point on Tuesday, day 28, placing the dollar in its timing band for a daily cycle low. The dollar formed a daily swing low on Wednesday, closing above the 200 day MA to confirm the new daily cycle.

The dollar is in a daily downtrend and will continue in its daily downtrend until it closes above the upper daily cycle band. Our intermediate cycle count is at 14 weeks, so our expectation is to see another left translated, failed daily cycle before the intermediate cycle low prints. The daily swing high that formed of Friday aligns with that expectation. A close back below the 200 day MA will signal that the dollar is declining into its daily cycle low and continuing its intermediate cycle decline.

Stocks
stocks

Stocks printed their highest point on Tues, day 30. A daily swing high formed on Thursday and stocks closed below the 10 day MA on Friday to confirm that stocks are declining into their daily cycle low.

Friday was day 33 for the daily equity cycle, placing stocks in their timing band for a daily cycle low. Once a daily swing low forms, it has good odds of marking the DCL. Stocks are in a daily uptrend and will remain so until they close below the lower daily cycle band.

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Daily Cycle Decline

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The daily equity cycle peaked on Tuesday, day 30, locking in a right translated daily cycle formation. Stocks went on to form a daily swing high on Thursday to signal the start of its daily cycle decline.

spx

Thursday was day 32 for the daily equity cycle. That places stocks in their timing band for printing a daily cycle low. The swing high that formed on Thursday broke below the daily cycle trend line providing more evidence that stocks are declining into their daily cycle low.

mc

The typical daily cycle decline will last anywhere from 7 to 15 days. A couple of things that we can watch for will be for the RSI to get oversold and that the McClellen oscillator hit the minus 60 to minus 80 range.

Counter Trend Set Up

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Stocks broke out to a new high on Tuesday. At 30 days, that locks in a right translated daily cycle formation. But despite printing a higher high, stocks closed lower on Tuesday setting up a potential counter trend move.

 photo spx daily.jpg

Tuesday was day 30 for the daily equity cycle, placing stocks in their timing band for seeking out a daily cycle low. The bearish close helps to ease the parameters for forming a daily swing high. A break below 2392.44 will form a daily swing high. Then a close below the 10 day MA will signal that the daily cycle is in decline. Stocks have established a daily uptrend. They will remain in their daily uptrend unless they close below the lower daily cycle band.

Bonds are also setting up for a counter trend move.

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Bonds printed a bullish reversal off the support from the 50 day MA. Tuesday was day 40 for the daily bond cycle. That places bonds very deep in there timing band for forming a daily cycle low. So the formation of a swing low has good odds of marking the daily cycle low. A break above 120.47 will form a daily swing low. And a break above the declining trend line will confirm the new daily cycle.

Bonds had established a daily uptrend prior to their daily cycle decline. Bonds managed to not close below the lower daily cycle band during its daily cycle decline, therefore maintaining its daily uptrend. Bond will remain in its daily uptrend unless it closes below the lower daily cycle band.

Oil Daily Cycle Low

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Oil formed a swing low on Monday.

oil

Oil printed its lowest point on Friday, following the day 15 peak. Friday’s bullish reversal eased the parameters for forming a daily swing low. Since 31 days places oil in its timing band for a daily cycle low, the swing low that formed on Monday signals a new daily cycle. A close above the 10 day MA will confirm the new daily cycle.

So while Friday has good odds of marking the daily cycle low, the question is if Friday also marks the intermediate cycle low. The formation of a weekly swing low would signal a new intermediate cycle. A break above 49.32 would form a weekly swing low.

oil yearly

But even if oil forms a weekly swing low, oil has not delivered a failed intermediate cycle. Since oil is in its timing band for a YCL, I would like to see a failed weekly cycle to complete the yearly cycle decline. Therefore oil would need one more failed daily cycle in order to form a failed weekly cycle. If that happens that would extend the yearly cycle decline by another 5 to 7 weeks.

But for now, it does look like a daily cycle low has formed. Next, a break above 49.32 would form a weekly swing low. Then if oil closes above the upper daily cycle band that would swing the odds in favor of this being a new intermediate cycle.