Still Seeking a Steel Bottom

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Back in April I began scouting for a yearly cycle low for steel. I admit that I was early. However I kept monitoring SLX and now the indicators are pointing to a possible yearly cycle low for steel.

3 slx yearly

Steel printed its lowest point in May following the month 13 peak. May was month 16 for the yearly steel cycle. Since the previous 5 yearly cycles averaged 10.4 months, 16 months places steel late in its timing band to print a yearly cycle low. So far steel has been rallying in June. A break above the May high of 38.59 forms a monthly swing low to signal a new yearly cycle.

1 slx weekly

The previous 7 intermediate steel cycles have averaged 16.7 weeks. Steel printed its lowest point back in May, at week 20. That places steel deep in in its timing band for an intermediate cycle low. While steel has printed a weekly swing low we can see that steel has been coiling and has yet to deliver confirmation that week 20 hosted the intermediate cycle low.

2 slx daily

Tuesday was day 17 for the daily steel cycle. At this point steel may need to dip down and print one more daily cycle low before breaking through the declining 50 day MA. But once steel closes above the 50 day MA, it will also close above the upper daily cycle band. A close above the upper daily cycle band signals a new intermediate cycle and also that May hosted the yearly cycle low.

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3 thoughts on “Still Seeking a Steel Bottom

  1. LM- Could you explain why you label the Jan2015 candle as the YCL for that year when almost every other subsequent candle that year has a lower low? TIA! Mike

    • Mike,

      Steel was headed down into a multi-year low at the time so there were a lot of bearish signals.
      However here is what convinced me to label Jan 2015 as the yearly cycle low:
      Timing Band
      A new intermediate cycle began in Jan 2015
      Bullish 30 line crossover on the monthly RSI 05
      Bullish crossover on the monthly TSI.

      LM

      • Thank you. So the YCL doesn’t have to be the low point for the year, just a low that fits the parameters you described…..got it. Appreciate the response.

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