The dollar formed a bearish reversal on Wednesday followed by a swing high on Thursday.
The dollar is in its timing band for an intermediate cycle decline. A peak on day 11 can still result in a left translated daily cycle formation. — which would allow the dollar to complete its intermediate cycle decline. Rejection by the 105 breakout level will signal the daily cycle decline and likely the intermediate cycle decline as well. Currently the dollar is in a daily uptrend. It will remain in its daily uptrend unless it closes below the lower daily cycle band.
Stocks broke the previous daily cycle low on Monday then continued lower through Friday.
Friday was day 19 – which is still early to expect a DCL to form. But with the previous daily cycle being stretched at 60 days, a shortened daily cycle would help to balance out the cycle counts. A break above 3707.71 will form a daily swing low. But we will wait until a break above the breakdown level of 3943.42 to label day 19 as an early DCL. Stocks are currently in a daily downtrend. They will remain in their daily downtrend unless they can close back above the upper daily cycle band.
Both gold & oil formed weekly swing highs this week.
Gold formed a bearish weekly reversal last week. This week gold is delivering bearish follow through by forming a weekly swing high. A close below the breakout level will signal the intermediate cycle decline.
Oil also printed a bearish weekly reversal last week and is delivering bearish follow through this week. Not only has oil formed a weekly swing high, oil also broke below the weekly trend line to signal the intermediate cycle decline. Oil should go on to break below the 10 week MA and turn it lower in order to complete its intermediate cycle decline. Oil is currently in a weekly uptrend. Oil will remain in its weekly uptrend unless it closes below the lower weekly cycle band.
The dollar printed a bearish reversal on Wednesday. The dollar broke above Wednesday’s high on Thursday and delivered bullish follow through on Friday to negate the bearish reversal.
The dollar is now stretched above the 10 day MA. A new high on day 19 locks in a right translated daily cycle formation, which aligns with the dollar being in a daily uptrend. The dollar will continue in its daily uptrend unless it closes below the lower daily cycle band.
Stocks closed below the declining 10 day MA on Friday.
After forming a swing low, Stocks have been crawling along the declining 10 day MA. Stocks will need to break bullishly above the 10 day MA and turn it higher to confirm day 22 as the DCL. However, stocks formed a swing high on Friday. Stocks are currently in a daily downtrend. Forming a swing high below the upper daily cycle band indicates a continuation of the daily downtrend and triggers a cycle band sell signal.
Tuesday was day 6 for the daily equity cycle, placing stocks in their timing band for a daily cycle low. Monday’s bearish reversal, in real time, looked as if stocks were declining into their daily cycle low. However, Tuesday’s bullish reversal calls that into question.
With the unprecedented flood of global liquidity along with stocks entering the most bullish time of the year, this maybe all the correction we will see. Stocks are currently in a daily uptrend. A close above the day 24 high of 4718.50 will indicate a continuation of the daily uptrend and trigger a cycle band buy signal. Stops could then adjusted to 4718.50.
Monday was day 35 for the daily equity cycle, placing stocks in their timing band for a daily cycle low. Monday’s bearish reversal eases the parameters for forming a daily swing high. A break below 4682.94 will form a swing high. Then a close below the 10 day MA will signal the daily cycle decline. Stocks should go on to break below the day 27 low in order to complete its daily cycle decline. Stocks are in a daily uptrend. Stocks will remain in their daily uptrend unless they close below the lower daily cycle band.
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.
At 23 weeks for the weekly cycle and 10 months for the yearly cycle, the dollar is late in both timing bands for an intermediate and yearly cycle decline.
The dollar printed a bearish reversal on Friday, day 6. A top on day 6 would set the dollar up for a left translated daily cycle formation. Then any bearish follow through could trigger the intermediate and yearly cycle decline. The dollar is 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 continued higher on this week.
The new high on day 24 locks in a right translated daily cycle formation. That aligns with stocks being in a daily uptrend. Stocks will remain in their daily uptrend unless they close below the lower daily cycle band.
The decline into the ICL stretched the ‘elastic band’ lower. Stocks are delivering bullish follow through on the breakout of the 4545.85 level. This could trigger a melt-up phase. I suspect that a daily cycle decline will back test the breakout level before the we see the melt-up phase.
Stocks broke out to a new daily cycle high on Tuesday. The new high on day 18 begins to shift the odds towards a right translated daily cycle formation.
We have been watching RSI as stocks emerged from their day 48 DCL. Just prior to the day 48 DCL, RSI became overbought twice. As it became overbought it delivered quick bearish reversals. Now we are seeing a change in behavior. RSI became overbought on Friday. However it did not deliver a quick bearish reversal. If RSI embeds in overbought that would indicate that stocks are resuming their intermediate cycle advance. Stocks have been consolidating for the past 2 weeks just below the all time high of 4238.04. A bullish break above this resistance level could lead to a trending move.
Friday was day 7 for the dollar’s daily cycle. Friday’s bearish reversal sets the dollar up for a left translated daily cycle formation. A swing high and close below the 10 day MA would signal the daily cycle decline. The dollar is in a daily downtrend. If the dollar forms a swing high below the upper daily cycle band then the dollar will remain in its daily downtrend and trigger a daily cycle sell signal.A break below 90.01 will form a daily swing high.
Stocks formed a swing low on Friday.
The rally out of the day 48 DCL did see stocks become stretched above the 10 day MA. Thursday’s bullish reversal allowed the 10 day MA to catch up to price. A break above the day 13 high will have us label day 15 as the half cycle low.
Since mid April, stocks have been consolidating, building up energy.
After consolidating for the past 2 months, a break out to new highs should lead to a bullish trending move.
Oil broke above the March high on Tuesday, establishing a new yearly cycle high.
After peaking in March, oil declined into a DCL. The ensuing daily cycle saw oil peak on day 39, which was below the March high. Oil printed a DCL on 5/21, which makes Tuesday — day 6 for the new daily cycle. After a 3 month consolidation, breaking out to a new high this early in the daily cycle should result in a bullish trending move. If oil delivers bullish follow through then the day 39 breakout level can be used as the stop.
However, there are some concerns.
This is month 14 for the yearly oil cycle, which places oil deep in its timing band for a yearly cycle decline.
There are bearish divergences developing on the oscillators.
Oil formed a bearish reversal on Tuesday.
If oil forms a swing high and closes back in the resistance zone that would jeopardize the breakout. A close below the resistance zone would set oil up for a left translated daily cycle formation.