Great Expectations

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With the start of a new year I thought that it would be interesting to take a look at some yearly cycles to set some expectations for the coming year.

oil

Oil broke out to a higher monthly high in December, month 10, placing oil in its timing band to seek out a yearly cycle low. A monthly swing high and a break of the monthly trend line will confirm the yearly cycle decline. Therefore we suspect that the intermediate cycle will form as a left translated cycle and fail, leading to the yearly cycle decline. The current daily cycle has a peak on day 19, which begins to shift the likelihood towards a right translated daily cycle formation. So it is likely that oil needs to wait until the next daily cycle before it will begin its yearly cycle decline.

spx

December is month 10 for the yearly equity cycle. A new high on month 10 assures us of a right translated yearly cycle formation. Stocks are now in their timing band for seeking out their yearly cycle low. A monthly swing high accompanied by a break of the monthly trend line will confirm the yearly cycle decline. The earliest that yearly cycle low will print is with the intermediate cycle low. With the intermediate cycle on week 8, that should stretch the yearly cycle out to months 13 or 14.

steel

Steel has printed a bearish monthly reversal. That has eased the parameters for forming a monthly swing high. It is also in its timing band to seek out a yearly cycle low. A break below 37.78 will form a monthly swing high to signal the start of its yearly cycle decline. It looks like steel will need to print one more failed daily cycle to usher in its yearly cycle low.

gdx

Despite Friday’s bearish close, the Miner’s monthly chart looks bullish. The Miners printed a bullish monthly reversal. December was month 11, placing the Miners in their timing band for a yearly cycle low. The bullish monthly reversal eases the parameters for forming a monthly swing low. A break above 22.24 will form a monthly swing low to signal the new yearly cycle. The Miners are currently below the upper monthly cycle band but above the lower monthly cycle band so they remain in a monthly uptrend. The Miners will continue in their monthly uptrend unless they close below the lower monthly cycle band.

My goal is to develop an on-going framework of expectations using cycle analysis.

The ideal time to buy is at a cycle low. 
* There are 4 cycle lows that I cover:
– The daily cycle low
– The intermediate (weekly) cycle low
– The yearly cycle low
– the multi-year cycle low

Perhaps you would like to integrate cycle analysis into your plans for this year.

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* The Weekend Report
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and I also post what I call my Weekend Updates.
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* The FAS Buy/Sell Indicator
* NATGAS
* XLE
* Copper
* GYX
* The Bullish Percentage BINGO

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2 thoughts on “Great Expectations

  1. Pingback: More Expectations | Cycle Trading

  2. Pingback: Bullish Behavior | Cycle Trading

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