Miner Concerns

The Miners printed a bearish reversal on Tuesday.

The Miners have been in the declining phase of the intermediate cycle since June. That has been characterized by the weekly RSI 05 becoming embedded in oversold. Another characteristic of the declining phase of the intermediate cycle is a quick bearish reversal once RSI reaches overbought — which we see happening. Tuesday’s bearish reversal has the Miners threatening to lose the 50 week MA. If the Miners deliver bearish follow through and close below the 50 week MA that will set the Miners up for a left translated weekly cycle formation which will continue the declining phase of the intermediate cycle.

Stocks Deliver Bearish Follow Through

We discussed on Tuesday how stocks lost the 10 day MA. Stocks delivered bearish follow through on Thursday.

Thursday was day 29 for the daily equity cycle, placing stocks in the early part of the their timing band for a daily cycle low. Stocks should break below the day 21 low of 4305.91 in order to complete their daly cycle decline. There are bullish divergences developing on the oscillators that often precede a cycle low. There is a chance that stocks will break below the day 21 low and form a bullish reversal, which would ease the parameters for forming a swing low. Still, we should wait for a swing low to signal the new daily cycle. In the Weekend Report I plan to discuss how stocks are also seeking out their intermediate cycle low.

The 9/04/21 Weekend Report Preview

The Dollar

The dollar closed below the 50 day MA on Wednesday then delivered bearish follow through Thursday and Friday.

Friday was day 25 for the daily dollar cycle, which places it in its timing band for a DCL. Closing below the 50 day MA signals that the intermediate cycle decline has begun. The dollar also closed below the lower daily cycle band. Closing below the lower daily cycle band ends the daily uptrend and begins a daily downtrend. It is another signal that the intermediate cycle decline has begun. However a failed daily cycle is needed to confirm the intermediate cycle decline. A break below the previous DCL of 91.76 will form a failed daily cycle.

Stocks

Stocks formed a daily swing high on Friday.

At 26 weeks, stocks are due for an intermediate cycle decline. There are bearish divergences developing on the oscillators. With a peak on day 10, if stocks deliver bearish follow through to close below the 10 day MA that would set stocks up for a left translated daily cycle formation. Then a break below the previous daily cycle high of 4480.26 can be used as a hard stop to to avoid a potential ICL decline.

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

The entire Weekend Report can be found at Likesmoney Subscription Services

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Gold Held Support

Gold ran into resistance at the 200 day MA on Tuesday, then formed a swing high on Wednesday, closing below the 50 day MA.

However, gold did not deliver bearish follow through. Instead, gold formed a bullish reversal on Thursday — closing above support from the converging 50 day MA and 10 day MA. Thursday was only day 13 for the daily gold cycle, leaving gold up to 2 to 4 weeks before printing a DCL. So there is plenty of time for gold to make another leg higher. A swing low here will set gold up for a potential break above the 200 day MA. Long positions can be entered (or added to) on a swing low, using the converging 50 day MA and 10 day MA as the stop.

Stocks Deliver Bearish Break

Stocks broke out above the day 17 high on day 24. They had been consolidating above the day 17 high — until Monday.

Stocks broke bearishly out of consolidation on Monday to close below the day 17 high and the 10 day MA. At 30 days, any bearish follow through will signal the daily cycle decline. Stocks should then go on to break below the daily cycle trend line in order to complete their daily cycle decline. Stocks are currently in a daily uptrend. But a close below the lower daily cycle band will end the daily uptrend and begin a daily. downtrend.

Stocks Deliver Bearish Follow Through

Stocks formed a swing high on Thursday then delivered bearish follow through on Friday.

Fridays’ bearish follow through closed below both the 10 day MA and the daily cycle trend line to indicate the daily cycle decline. A peak on day 17 could still result in a left translated daily cycle formation. And with stocks on week 19, this could result in an intermediate cycle decline. Typically we see a failed daily cycle in an intermediate cycle decline. A break below 4164.40 will form a failed daily cycle. Stocks are currently in a daily uptrend. They will remain so, unless they close below the lower daily cycle band.

Stocks Deliver Bearish Follow Through

After forming a daily swing high on Monday, stocks delivered bearish follow through on Tuesday.

Tuesday was day 32 for the daily equity cycle. That places stocks in their timing band for a daily cycle low. Closing below the 10 day MA signals the daily cycle decline. Stocks should go on to break below the (blue) daily cycle trend line as it seeks out its daily cycle low. Stocks are currently in a daily uptrend and will remain so unless they close below the lower daily cycle band.

Stocks – Looking for 3 Things

Stocks closed below the 50 day MA on Monday. If stocks deliver any bearish follow through that would indicate a continuation of the daily cycle decline. A break below 3694.12 would form a failed daily cycle.

There are 3 things that I am looking for to signal that the correction is over.

First – Stocks need to recover the 50 day MA and go on to close above the 10 day MA. Doing so will have us label day 23 as an early DCL. The previous DCL was stretched at 61 days. Often times cycles will follow a stretched cycle with a shortened cycle — which balances out the cycle counts.

Second- Stocks need to deliver bullish follow through and break above the declining trend line. Breaking above the declining trend line will indicate that day 23 was the DCL.

Third –Stocks need to form a weekly swing low. Week 23 placed stocks in their timing band for an intermediate cycle low. A break above 3914.50 will form a weekly swing low. Stocks are in a strong weekly uptrend.  If a weekly swing low forms then stocks will remain in their weekly uptrend and trigger a weekly cycle band buy signal.

Miner Rejection

Rejection by the 50 day MA has extended the Miners daily cycle decline.

The Miners closed lower on Thursday then delivered bearish follow through on Friday. The miners closed below the day 32 low on Friday signaling a continuation of the daily cycle decline. The Miners also closed below the lower daily cycle band. Closing below the lower daily cycle band ends the daily uptrend and indicates that the intermediate cycle decline is extending.

I breakdown what is happening with the intermediate cycle in the Weekend Report.

Oil Rejected

After peaking on day 7, oil had been finding support at the rising 10 day MA – until Tuesday.  Oil closed below the rising 10 day MA and the 200 day MA on Tuesday.  Then oil delivered bearish follow through as it was rejected by the declining trend line on Thursday.

Oil closed below both the 10 day MA and the 200 day MA on Thursday to signal the daily cycle decline. Thursday was day 16 for the daily oil cycle. The peak on day 7 sets oil up for a left translated daily cycle formation. A break below the previous daily cycle low of 36.13 will form another failed daily cycle and continue the intermediate cycle decline. That aligns with oil being in a daily downtrend.  Oil will remain in its daily downtrend unless it can close back above the upper daily cycle band.