Gold Update

Gold broke below the previous DCL on Monday to form a failed daily cycle and signal that gold is also seeking out its ICL.  

Gold delivered bearish follow through on Wednesday, closing below the 1900 support level. However in the Thursday morning premarket — gold is in the process of forming a bullish reversal. If gold can form a bullish reversal on Thursday then a swing low and recover the 1900 level — that would signal the daily cycle low and possibly the intermediate cycle low as well. Which I plan to discuss further this weekend in the Weekend Report.

Oil Delivers Bearish Follow Through

On Monday we discussed how oil gave a bearish signal. Oil delivered bearish follow through on Thursday.

Oil was rejected by the converging declining trend line and the 10 day MA on Thursday. Notice that prior to the day 72 DCL, oil had been in an intermediate cycle advance characterized by RSI 05 embedding in overbought and reversing quickly if oversold. That has changed. RSI 05 did not embed in overbought as oil rallied out of the day 72 DCL. With a peak on day 5, oil is setting up for a left translated daily cycle formation which indicates that oil is starting its intermediate cycle decline. If RSI 05 embeds in oversold that will signal that oil has entered its declining phase of its intermediate cycle.

Gravitational Pull

Stocks closed below the 200 day MA on Thursday then delivered bearish follow through Friday and Tuesday to signal the daily cycle decline. But there is something more sinister afoot.

Stocks are overdue for their yearly cycle low and appear to be feeling the gravitational pull of the pending YCL. A monthly swing high is required to complete the yearly cycle decline. A break below the previous DCL of 4222.62 will form a monthly swing high.

The First Domino

The first domino fell on Friday.

After consolidating below resistance for 2 months, stocks broke out convincingly above the resistance level on Monday. Stocks became stretched above the 10 day MA on Monday and started to consolidate, which will help to allow the 10 day MA catch up to price.  However, stocks formed a swing high on Friday. If stocks deliver bearish follow through and close below the resistance level that will signal the daily cycle decline. And may set the ‘dominos’ in motion to lead to the intermediate and yearly cycle declines. I discuss this in the Weekend Report.

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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.

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.

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.

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.

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