Emerging Markets Deliver Bullish Follow Through

Last Week we looked at the opportunity in the Emerging Markets. It appeared that the Emerging Markets were on the verge of forming a daily, intermediate, and yearly cycle low. EEM formed a daily swing low on Friday to signal the new daily cycle. Then EEM delivered bullish follow through on Monday.

EEM printed its lowest point on week 20, placing it in its timing band for an intermediate cycle low. EEM did form a marginal weekly swing low last week. However, this week EEM is delivering clear and convincing bullish follow through to signal that week 20 hosted the intermediate cycle low. A break of the declining trend line is needed to confirm the new intermediate cycle. And with EEM being in its timing band for a YCL, once the ICL is confirmed it will likely trigger a new yearly cycle as well.

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The 7/06/18 Weekend Report Preview

The Dollar

The dollar peaked on day 11. It formed a swing high, negating the break out. It closed below the 10 day MA, turning it lower to signal the daily cycle decline. The dollar then closed below the daily cycle trend line to confirm the daily cycle decline.

Friday was day 16 for the dollar’s daily cycle. While the dollar managed to find support at the rising 50 day MA, it is a bit early to expect a DCL to form. And with the dollar in its timing band for an intermediate cycle decline it is more likely to see the dollar break below the 50 day MA to continue its daily cycle decline. The dollar is currently in a daily uptrend. It will remain in its uptrend unless it closes below the lower daily cycle band.

Stocks

Stocks closed convincingly above the declining daily cycle trend line on Friday to confirm the new daily cycle.

Stocks also closed above the upper daily cycle band. This ends the daily downtrend and begins a daily uptrend. With this being week 21 for the intermediate cycle we need to watch for a left translated daily cycle formation.

The decline into the DCL caused stocks to close below the 10 week MA. But the rally into the new daily cycle allowed stocks to regain the 10 week MA. At 21 weeks, stocks are in their timing band for a intermediate cycle decline. A weekly swing high and break below the weekly trend line is needed to confirm the intermediate cycle decline. Stocks are in a weekly uptrend. They will remain in their weekly uptrend unless they close below the lower weekly 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

Another Bearish Signal for Stocks

Stocks printed their lowest point on day 39, following the day 28 peak. That placed stocks in their timing band for a DCL. Stocks formed a swing low. Then on Thursday they closed above both the 10 day MA and the declining trend line to confirm the new daily cycle.

However, stocks delivered another bearish signal on Thursday.

Stocks printed another Selling on Strength day on Thursday. So far the 3 bullish days were also SOS days.

It is unusual to see these SOS days as stocks begin to rally out of a DCL. Taking a look at the rally out of the previous DCL we can see that stocks did not print a Selling on Strength day until day 14.

Currently, stocks are in their timing band for an intermediate cycle decline, which is something that I will discuss in the Weekend Report.I believe that the clustering of these SOS days is a warning signal for the pending intermediate cycle decline.

Emerging Opportunity

An opportunity is developing in the emerging markets.

The emerging markets (EEM) have been averaging a yearly cycle low every 9.8 months. EEM last printed a yearly cycle low on November, 2017. With July being 20 months since EEM last printed an identifiable yearly cycle low that makes EEM overdue for its YCL. EEM did peak in January, month 14, and has been in decline ever since. Once a new intermediate cycle begins, it will likely also mark the beginning of the new yearly cycle.

The emerging markets (EEM) have been averaging an intermediate cycle low every 21. weeks. EEM last printed an intermediate cycle low in February, 2018. This week makes it 21 weeks since EEM last printed an identifiable intermediate cycle low. Which places EEM in its timing band for an ICL. Once a new daily cycle begins, it will likely also mark the beginning of the new intermediate cycle.

The emerging markets (EEM) have been averaging a daily cycle low every 18.5 days. EEM last printed an identifiable DCL on May 29th. EEM printed its lowest point on Thursday, 6/28. At 22 days that places EEM in its timing band for a DCL. A swing low has already formed. A close above the 10 day MA will signal a new daily cycle. The new daily cycle should trigger a new intermediate cycle and a new intermediate cycle should also trigger the new yearly cycle.

Divergent Energy

Oil continues to make higher highs.

Tuesday was day 11 for the daily oil cycle and oil printed another higher high.

The bigger picture is that oil is on month 13 for the yearly oil cycle. Which places oil in its timing band for a yearly cycle decline. Oil needs to form a monthly swing high in order to begin its yearly cycle decline. And since oil has made a higher high in July, the earliest a monthly swing high can form will be in August.

And while oil has been making higher highs’ The Energy Sector has been diverging. And I believe that the divergent energy is heralding the yearly cycle decline for oil.

July is month 11 for the energy sector. That places energy in its timing band for a yearly cycle decline. While oil did print a higher high in July, it appears that May was the yearly cycle peak for XLE. A monthly swing high is required to confirm the yearly cycle decline. A break below May’s low of 71.94 will form a monthly swing high.

Bearish Signal for Stocks

Stocks delivered another bearish signal on Monday.

Stocks printed their lowest point on Thursday, following the day 28 peak. Thursday was day 39, placing stocks in their timing band for a DCL. While stocks have formed a swing low, we are still waiting on a break of the declining trend line to confirm that day 39 hosted the DCL.

But regardless if day 39 was the DCL, stocks delivered a second bearish signal on Monday. The first was the 523 million selling on strength that printed on Thursday. That was followed up by 216 million selling on strength on Monday. Usually we see selling on strength numbers near cycle tops. It is very unusual to see a SOS number at or near the cycle bottom, unless there is a longer term concern. Which in this case is that stocks are in their timing band for an intermediate cycle decline. This was something that I covered in the past weekend’s Weekend Report.

The 6/29/18 Weekend Report Preview

The Dollar

Friday’s bull trap signals the daily cycle is in decline.

The dollar closed above the previous high on Thursday. But Friday’s huge bearish candle closed below the 10 day MA and manged to turn the 10 DMA lower to signal the daily cycle decline. While a new high on day 11 shifts the odds towards a right translated daily cycle formation, the bull trap and huge sell off on Friday has me thinking that the dollar will form a failed daily cycle. Currently, the dollar is in a daily uptrend. It will remain in its uptrend unless it closes below the lower daily cycle band.

Stocks

On Friday, stocks formed a swing low and closed above the 50 day MA to signal a new daily cycle.


Stocks printed their lowest point on Thursday, day 39, placing them in their timing band for a DCL. While Friday’s swing low indicates a new daily cycle, stocks will need to break above the declining trend line to confirm the new daily cycle. Stocks have begun a daily downtrend. They will remain in its downtrend unless they close above the upper 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

The 6/29/18 Morning Report

Stocks have formed a swing low in overnight trading.

Stocks printed their lowest point on Thursday following the day 28 peak. Thursday was day 39, placing stocks in their timing band for a daily cycle low. Therefore the swing low the formed in overnight trading has good odds of beginning the new daily cycle.

However stocks delivered a clear warning signal for this new daily cycle.

Stocks printed 523 million Selling on Strength on Thursday. We typically Selling on Strength numbers nearing cycle peaks, not cycle bottoms. Seeing this large SOS number on what potentially is the DCL is a warning signal which aligns with our intermediate cycle framework that stocks are declining into an intermediate cycle low. Stocks still need to complete their intermediate cycle decline (which I will detail in the Weekend Report). Therefore our expectation is to see a left translated daily cycle formation which will allow stocks to complete their intermediate cycle decline.

Miner Undercut

The Miners undercut the day 20 low on Tuesday.

The Miners broke below the day 20 low on Tuesday, extending the daily cycle decline to day 23. This places the Miners in their timing band for a daily cycle low. Which increases the odds that the next swing low will signal a new daily cycle.

In the Weekend Report I also discussed how the Miners are now in their timing band for a longer term, intermediate cycle low. So once a daily cycle low forms, it will likely mark the intermediate cycle low. Bullish divergences are beginning to appear on the oscillators, which we often see at the longer term, intermediate cycle low. And once the intermediate cycle low forms, the Miners should trend higher for the next 12 to 18 weeks before the intermediate cycle tops.

Sizzling Summer Sale

The summer mark down for stocks have begun.

This is week 20 for the intermediate equity cycle. That places stocks in their timing band for an intermediate cycle low. Stocks formed a weekly swing high last week and are delivering bearish follow through this week. The best sale prices will coincide with the intermediate cycle low. Stocks should break below the weekly trend line and manage to turn the 10 week MA lower before it prints its intermediate cycle low.

Monday was day 36 for the daily equity cycle. So stocks are also in their timing band to print a daily cycle low. Stocks could print a DCL this week. If so then stocks will likely need one more daily cycle to break below the weekly trend line and to turn the 10 week MA lower to complete the intermediate cycle decline.