Oil Breaks Higher

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Last Tuesday we looked at oil.

oil 4:04

Last week oil delivered bullish follow through to the weekly swing low. We discussed that oil needed to break above the declining weekly trend line to confirm a new intermediate cycle.

Oil broke above the weekly trend line on Monday.

oil 4:10

Oil delivered a clear and convincing break above the declining weekly trend line on Monday. Barring a complete reversal, this confirms that this is week 3 for the new intermediate oil cycle.

Oil had established a weekly uptrend prior declining into the week 18 low. Oil remained above the lower weekly cycle band as it printed the week 18 intermediate cycle low which indicates that oil remained in its weekly uptrend. Oil broke back above the upper weekly cycle band on Monday, continuing its weekly uptrend. Oil will remain in its weekly uptrend unless it closes back below the lower weekly cycle band.

The 4/07/17 Weekend Report Preview

The Dollar
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The new high on Friday, day 9, begins to shift the likelihood towards a right translated daily cycle formation.

The dollar broke convincingly higher on Friday. The dollar closed above the upper daily cycle band which signals an end to the daily downtrend and indicates that 3/27/17 hosted the ICL.

Stocks
stocks

Stocks broke above the declining trend line this week to signal that day 58 hosted the DCL.

So far the rally out of the day 58 DCL has been weak. The bearish reversal on Wednesday, day 7, sets up the potential for an extremely left translated daily cycle formation. This is the 3rd daily cycle for the current intermediate cycle. We are watching for a left translated daily cycle formation to set up a decline into the ICL. A break below 2322.25 forms a failed daily cycle and confirms the intermediate cycle decline. But there were two strong BOW days this week that signals that stocks will make one more push higher. A possible scenario would be a break higher to get everybody “on the wrong side of the boat”. Followed by the final decline into the ICL.

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Also included in the Weekend Report is the Likesmoney CycleTracker

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Looking for Evidence

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Stocks have formed a weekly swing low this week.

1 spx weekly swing

Last week stocks printed their lowest point following the week 17 peak. At 21 weeks, that places stocks in their timing band for an intermediate cycle low. So while a swing low can signal a new intermediate cycle, I do not believe that the evidence supports that week 21 hosted an ICL.

spx

Stocks broke above the declining trend line on Wednesday to signal that day 58 was a daily cycle low. One of the reasons that I doubt that day 58 hosted an ICL is that the rally so far has been timid. Normally out of an ICL stocks can rally anywhere for 5 – 8% over the first week or so, which has not happened here. Stocks also have formed a bearish TSI zero line crossover. That is a signal that we typically see as stocks start to roll over into a daily cycle decline.

spx weekly

So I suspect that the weekly swing low that has formed is only setting the declining trend line. Rejection by the declining trend line should send stocks into their final decline into their intermediate cycle low. Stocks would need to break below the week 21 ow of 2322.25 in order to complete their intermediate cycle decline.

Oil Bounce or Oil Bull?

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Oil printed its lowest point on week 18, following the week 7 peak. While 18 weeks is a bit early to expect to see an intermediate cycle low, the weekly swing low and bullish follow through indicate otherwise …

oil weekly

Oil consolidated in a narrow trading range over 11 weeks before declining into the week 18 low. Normally a break out of a narrow range yields a trending move. But the move lower was halted by the 50 week MA, which has also stopped the previous 2 intermediate cycle declines. This has me suspicious that the move lower was a fake out move. And now we see that the the weekly TSI has formed a bullish crossover after emerging from a level that has marked the previous yearly cycle low.

oil weekly 2

If oil is still declining into its intermediate cycle low then it should be turned back at the declining weekly trend line. However a bullish break above the declining weekly trend line will signal that week 18 did host an early intermediate cycle low. We also need to recognize that oil established a weekly uptrend by closing above the upper weekly cycle band before it began its intermediate cycle decline. And oil remains in its weekly uptrend since it not close below the lower weekly cycle band as it declined into the week 18 low.

Setting Course

Last Monday, March 27th, stocks printed their lowest point following the day 40 peak. They have since formed a daily swing low and regained the 10 day MA to signal that stocks have begun a new daily cycle.

Monday was day 5 for the new daily cycle. And because this is the third daily cycle for the current intermediate cycle we need to be suspicious off a possible left translated cycle formation that will lead to a failed daily cycle and an intermediate cycle decline.

spx tline

We are still waiting on a break of the declining (blue) trend line to provide final confirmation that day 58 hosted the DCL. If stocks can form a swing low forms off of Monday’s candle that will allow us to construct the (dashed) daily cycle trend line. At this early stage of the daily cycle stocks should not break below the dashed daily cycle trend line. A break below the dashed trend line will be the warning signal to wait on the sidelines

The 4/01/17 Weekend Report Preview

The Dollar
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The dollar printed its lowest point on Monday, following the peak on day 19. Wednesday’s close above the declining 10 day MA signaled a new daily cycle.

While the previous daily cycle peaked on day 19 for a right translated cycle formation, it printed a lower high. And Monday’s break below the previous DCL establishes a pattern of lower lows. That signals a continuation of the intermediate cycle decline.

Stocks
stocks

Stocks formed a swing low on Tuesday. A break above the declining trend line will confirm a new daily cycle.

Stocks are beginning their 3rd daily cycle for the current intermediate cycle. And stocks are in their timing band to seek out an intermediate cycle low. A failed daily cycle confirms the intermediate cycle decline. What we need to watch is the translation of the new daily cycle. A left translated cycle formation would signal that stocks are declining into its intermediate cycle low.

Stocks remained above the lower daily cycle band is it declined into the day 58 low. Therefore stocks remain in a daily uptrend and will continue in their daily uptrend until it closes below the lower daily cycle band.

The entire Weekend Report can be found at Likesmoney Subscription Services

The Weekend Report discusses Dollar, Stocks, Gold, Miners, Oil, & Bonds in terms of daily, weekly and yearly cycles.
Also included in the Weekend Report is the Likesmoney CycleTracker

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You can email me at likesmoney@gmail.com to receive a sample copy of the Weekend Report

Divergent Energy

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Oil printed its lowest point on day 48, following the day 27 peak, placing oil in the later stage of its daily cycle timing band.

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Oil closed above the 10 day MA on Wednesday and delivered bullish follow through on Thursday to signal that oil has begun a new daily cycle.

2 oil weekly

Oil has formed a weekly swing low off of support at the 50 week MA. Since oil has formed 2 ICL’s at the support from the 50 week MA it is possible that week 18 hosted an early ICL. But the divergence in the Energy Sector ETF XLE suggests that oil could still print one more failed daily cycle.

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Oil railed for a 1.7% gain on Thursday while XLE close lower. That bearish divergence is a warning signal. So we need to be alert to the possibility that oil will print one more failed daily cycle to complete its intermediate cycle decline. A close below the lower daily cycle band would signal that oil is continuing its intermediate cycle decline.

Miner Top

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The Miners rallied out of the early March low but were halted by the 50 day MA on 3/17.

gdx Mon

The Miners preceded to consolidate below the 50 day MA and began to be squeezed by the convergence of the 50 day MA and the rising 10 day MA.

That convergence was resolved on Tuesday.

gdx tues

The Miners established a daily downtrend by closing below the lower daily cycle band as the declined into the early March DCL. Since they failed to close above the upper daily cycle band during this past leg up, they remain in a daily downtrend. With the Miners approaching their timing band for the daily cycle low, Tuesday’s close below the 10 day MA signals the start of their daily cycle decline.

And part of what is driving the Miners lower is the dollar.

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The dollar printed its lowest point on Monday, following the day 19 peak. Day 36 places the dollar well within its timing band to print a DCL. Tuesday’s swing low very likely means that Monday hosted the DCL. And as the dollar rallies out of its DCL that will help to push the Miners lower.

Possible Turning Points

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The dollar broke below the previous daily cycle low on Monday forming a failed daily cycle.

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Monday was day 36 for the dollar’s daily cycle. That places the dollar late in its timing band to print a daily cycle low. Monday’s bullish reversal has eased the parameters for forming a daily swing low. A break above 99.33 forms a daily swing low which has good odds of marking the DCL. A close back above the declining 10 day MA will confirm the new daily cycle.

Stocks also printed a bullish reversal on Monday.

spx

Monday was day 58 for the daily equity cycle, which is late in its timing band for stocks to form a daily cycle low. Stocks finally broke the daily cycle trend line, which needed to happen in order for stocks to complete their daily cycle decline. And once again, the bullish reversal has eased the parameters for stocks to form a daily swing low. A break above 2344.90 forms a daily swing low, which should mark the DCL. Then a close back above the declining 10 day MA will confirm the new daily cycle.

And not only are both the dollar and stocks forming daily cycle lows, but I think that we will find that both are also in the process of forming intermediate cycle lows as well. I plan to discuss the weekly cycles for both the dollar and stocks in Wednesday’s Mid-Week Report.

The 3/24/17 Weekend Report Preview

The Dollar
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The dollar formed a swing low on Friday.

The dollar printed it lowest point on Wednesday following the day 19 peak. That was day 33, placing the dollar deep in its timing band for a daily cycle low. The daily swing low that formed on Friday has good odds of marking the DCL. A close above the 10 day MA would signal a new daily cycle. It would also mean that the dollar did not break below the previous low of 99.19 to form a failed daily cycle. If day 33 is the DCL then the dollar would have formed a right translated daily cycle. A right translated daily cycle formation would indicate that the February DCL did host the intermediate cycle low. However, a break below the previous DCL of 99.19 will negate the right translated cycle formation. It will also signal a continuation of the intermediate cycle decline.

Stocks
stocks

Stocks printed a lower low on Friday.

At day 57, that places stocks deep in in their timing band to print a daily cycle low. A swing low would signal a new daily cycle. I still would like to see a clear and convincing break of the (black) daily cycle trend line before being satisfied that the daily cycle low is in. However if stocks go on to rally from here and break above the declining (blue) trend line then that would signal that Friday hosted the daily cycle low. Stocks are in a daily uptrend. They will remain in their daily uptrend unless they close below the lower daily cycle band.

The entire Weekend Report can be found at Likesmoney Subscription Services

The Weekend Report discusses Dollar, Stocks, Gold, Miners, Oil, & Bonds in terms of daily, weekly and yearly cycles.
Also included in the Weekend Report is the Likesmoney CycleTracker

For subscribers click here.

You can email me at likesmoney@gmail.com to receive a sample copy of the Weekend Report