Stocks Print Bullish Reversal

Stocks printed a bullish reversal on Tuesday.

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.

Bearish Reversal

Stocks formed a bearish reversal on Monday.

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.

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.

The 11/06/21 Weekend Report Preview

The Dollar

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

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.

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Right Translation

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.

The 6/05/21 Weekend Report Preview

The Dollar

The dollar formed a bearish reversal on Friday.

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

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.

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

Oil Breaks Out To A New Yearly High

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.

The 2/06/21 Weekend Report Preview

The Dollar

The new daily cycle high on 21 shifts the odds towards a right translated daily cycle formation. That aligns with the dollar being in a daily uptrend and rallying out of an intermediate cycle low.

The dollar printed a huge bearish reversal on Friday. This eases the parameters for forming a swing high. A break below 90.96 will form a swing high. Then a break below the daily cycle trend line will indicate the daily cycle decline.

Stocks

Stocks broke out to new highs on Thursday and delivered bullish follow through on Friday. 

Friday was day 5 for the new daily cycle. The quick bullish reversal of RSI is characteristic of an intermediate cycle advance. RSI is approaching overbought. If RSI embeds in overbought that would indicate a resumption of the intermediate cycle advance.

A resumption of the intermediate cycle advance would signal that the breakout continues to advance. 

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

Breakout

Stocks breakout to close at a new all time high on Monday.

Stocks did have a false breakout in early September. Last Monday stocks printed bearish reversal which looked as if stocks once again formed a false breakout.

However, stocks printed a bullish reversal on Tuesday at the neckline support. Stocks backtested the neckline support on Thursday then formed a swing low on Friday. Stocks closed above the upper megaphone trend line on Monday. Long positions can be entered here using the September high as the stop. And a close above the day 6 high of 3645.99 would mean that a bubble scenario is back on the table.

Bearish Reversal

Stocks formed a bearish reversal on Monday.

The rally out of the day 26 low saw stocks get quite stretched above the 10 day MA. And some consolidation is needed to allow the 10 day MA to catch up to price. But there maybe something more sinister going on here.

Recall that stocks appeared to have delivered a classic false breakout in early September. Stocks formed a swing high and closed below upper stem of the megaphone to signal the daily cycle decline. With stocks in their timing band for an intermediate cycle decline – this could have triggered a revision to the mean. Instead stocks found support at the 3200 level.

On Monday, stocks once again pierced the upper megaphone trend line.

Back in September, stocks managed to actually close above the upper megaphone trend line. But then was soundly rejected by it. On Monday, stocks did break out to an all time high. However, stocks could not hold on to the new high and reversed into the close. Stocks closed below the Early September high and below the upper megaphone (blue) trend line. If stocks deliver bearish follow through to close back below the red trend line that would signal a possible top on day 6 to set up a left translated daily cycle formation.