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Stocks Print Bullish Reversal

Stocks closed below the 50 day MA on Monday, turning the 10 day MA lower, to signal the daily cycle decline. That was negated on Tuesday.

Stocks formed a swing low on Tuesday. Stocks are currently in a daily uptrend. Forming a swing low above the lower daily cycle band indicates a continuation of the daily uptrend and triggers a cycle band buy signal, using Monday’s low as the stop. Positions can be added to with a close above the 4715 resistance level.

Bearish Follow Through

Stocks dropped 1.14% on Monday. .

After being rejected by resistance at the 4715 level, stocks formed a swing high and closed below the 10 day MA on Friday. They delivered bearish follow through on Monday by closing below the 50 day MA. Stocks also started to turn the 10 day MA lower on Monday. The peak on day 9 sets stocks up for left translated daily cycle formation. A close below the previous DCL of 4495.12 will form a failed daily cycle signaling that the intermediate cycle decline has begun and quite likely — the yearly cycle decline as well. Which I plan to discuss further in the Mid-Week Update.

The 12/18/21 Weekend Report Preview

The Dollar

The status of the daily cycle is not clear.

While the dollar formed a swing high and closed below the 10 day MA on day 22, it did not do ‘enough’ for us to label day 22 as the DCL. It has been 3 weeks and the dollar has been crawling along the 10 day MA, no doubt due to the heavy manipulation in the currency markets. So we may need to turn to the weekly chart for more clarity. (The weekly chart can be found in The Weekend Report) What is clear is that the dollar is in a daily uptrend and will remain so unless it closes below the lower daily cycle band.

Stocks

It is concerning that since forming its DCL, stocks have been unable to deliver any bullish follow through.

We need to keep in mind that stocks are on month 21 for the yearly cycle. Which means that stocks are way overdue for a yearly cycle decline. Stocks formed a swing high on Friday. A close below the 50 day MA will trigger our stop. Then a close below the lower daily cycle band will end the daily uptrend and begin a daily downtrend, potentially beginning the yearly cycle decline.

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Miner Rally

The Miners formed a swing low on Thursday.

The Miners broke below the day 46 low on Tuesday then delivered bearish follow through on Wednesday.  Wednesday was day 54, placing them very deep in their timing band for a DCL.  The Miners formed a bullish reversal on Wednesday which eased the parameters for forming a swing low.  The Miners then formed a swing low on Thursday that closed above the declining trend line and turned the 10 day MA higher so we will label day 54 as the DCL.   The Miners are currently in a daily downtrend. But a close above the upper daily cycle band will end the daily downtrend and begin a new daily uptrend.

Still Waiting …

On Monday we discussed that we were waiting on a close above the 4720 resistance level to add to positions. We are still waiting.

Stocks had gapped up over the 10 day MA last week during the initial surge out of its DCL. Stocks retraced a bit on Tuesday, backfilling that gap.

Stocks are currently in a daily uptrend. If stocks form a swing low above the lower daily cycle band then they will remain in their daily uptrend and trigger a cycle band buy signal. A close above 4660.47 will form a daily swing low. The plan remains the same. Add on a close above resistance and use a close below the rising 50 day MA as the stop.

Waiting on Stocks

We are waiting on a close above the 4720 resistance level to add to positions.

However, stocks are still being contained by the resistance at the 4720 level. From Mid -Ocitober to early November stocks were in a strong daily uptrend that was in part characterized by RSI embedding in overbought. Since rallying out of the day 43 DCL, RSI has not been able to embed again in overbought. Stocks were turned back by the 4720 resistance level on Monday. If stocks deliver any bearish follow through then we will need to honor the stop at the rising 50 ay MA.

Gold – Still Waiting on a Trend

My apologies to Mick & Keith

This is the one chart to watch for gold’s next trending move. Gold is in a monthly triangle consolidation. In a triangle consolidation the cycle low can migrate to the apex of the triangle. A bullish close above the declining monthly trend line should result in a powerful trending move.

Running Into Resistance

Stocks are running into resistance at the previous breakout level.

The initial surge out of the DCL caused stocks to get a bit extended above the 10 day MA. The 10 day MA is beginning to flatten out. Stocks will need to get the 10 day MA to turn higher before the rally out of the DCL can gain any traction.

Stocks are heading into the most bullish time of the year. If stocks can quickly breakout above the all-time high of 4743.83, that could trigger a melt-up phase.

Boom Goes The Dynamite

While stocks formed a swing low on on Monday, they were contained by the 10 day MA.

Boom.

Stocks gapped above the declining trend line to end up rallying for 2.07% on Tuesday to signal the new daily cycle. Stocks also closed above the upper daily cycle band on Tuesday. Closing above the upper daily cycle band ends the daily downtrend and renews the daily uptrend.

Stocks are heading into the most bullish time of the year. If stocks can quickly breakout above the all-time high of 4743.83, that could trigger a melt-up phase.

Stocks Recover The 50 Day MA — Again

Stocks are going through a volatile bottoming phase.

Stocks lost the 50 day MA on Wednesday, regained it on Thursday, lost it again on Friday and then regained it again on Monday. Stocks also formed a swing low on Monday. With stocks are in their timing band for a DCL, a close above the 10 day MA will signal a new daily cycle.

Stocks are heading into the most bullish time of the year. If stocks can quickly breakout above the all-time high of 4743.83, that could trigger a melt-up phase.