Monday was day 12 for the daily equity cycle and stocks broke out to new highs by breaking through the 2000 level for the first time ever. The intra-day high of 2001.95 breaks through the important 2000 psychology level.

spx daily

Stocks are in the first daily cycle of a new intermediate cycle. The first daily cycle of a new intermediate cycle usually forms in a right translated manner. Therefore we expect to see stocks form a peak after day 20.

Stocks did close off the intra-day high. Stocks have also become a bit stretched above the 10 day MA. So after breaking through this important level, stocks may need a breather.

$ SPX tsi

Above is a two year look at the S&P. You will notice that the True Strength Indicator has reached a level that has previously seen stocks turn lower. Should a bearish TSI form, then stocks are likely to head into a half-cycle low. But since stocks are in their first daily cycle, stocks are likely to recover and press on to new highs, once again.

And NATGAS broke above its declining cycle trend line today.

nat gas daily

NATGAS printed a daily cycle high on August 12th. It then printed it lowest point since the 12th last Monday, 8/16. After consolidating for a few days NATGAS finally broke above the declining trend line to confirm today as day 5 of a new daily cycle.

nat gas yearly

I continue to believe that NATGAS is leaving behind a yearly cycle low. NATGAS found support at the 200 month MA and has been struggling to break through the $4 level. With the “fresh legs” of a new daily cycles I suspect that we will see NATGAS break above the $4 level and then go on to break above the declining monthly trend line to confirm a new yearly cycle.


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