The 1/08/22 Weekend Report Preview

The Dollar

The dollar printed its lowest point on day 22, which is a bit early for a DCL.

While the dollar formed a swing low and closed above the 10 day MA on Monday, it did not deliver any bullish follow through. Then the dollar lost the 10 day MA on Friday to signal a continuation of the daily cycle decline. A break below the previous DCL of 95.54 will form a failed daily cycle. he dollar currently is in a daily uptrend.  The dollar will remain in its daily uptrend unless it closes below the lower daily cycle band. 

Stocks

Stocks have been consolidating below the 4800 resistance level until Wednesday.

Stocks printed a huge bearish candle on Wednesday to signal the daily cycle decline. Stocks printed their lowest point on Friday, day 23, which is a bit early to expect a DCL. So any bounce off the 50 day MA should be contained by the 10 day MA so stocks can complete their daily cycle decline. 

However, stocks are currently in a daily uptrend. If stocks form a swing low and close back above the 10 day MA then that would indicate a continuation of the daily uptrend and trigger a cycle band buy signal. Under this scenario, we would label day 23 as an early DCL. 

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The 12/18/21 Weekend Report Preview

The Dollar

The status of the daily cycle is not clear.

While the dollar formed a swing high and closed below the 10 day MA on day 22, it did not do ‘enough’ for us to label day 22 as the DCL. It has been 3 weeks and the dollar has been crawling along the 10 day MA, no doubt due to the heavy manipulation in the currency markets. So we may need to turn to the weekly chart for more clarity. (The weekly chart can be found in The Weekend Report) What is clear is that the dollar is in a daily uptrend and will remain so unless it closes below the lower daily cycle band.

Stocks

It is concerning that since forming its DCL, stocks have been unable to deliver any bullish follow through.

We need to keep in mind that stocks are on month 21 for the yearly cycle. Which means that stocks are way overdue for a yearly cycle decline. Stocks formed a swing high on Friday. A close below the 50 day MA will trigger our stop. Then a close below the lower daily cycle band will end the daily uptrend and begin a daily downtrend, potentially beginning the yearly cycle decline.

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.

Stocks Waiting on Bullish Follow Through

While stocks formed a swing low on Friday, they did not deliver bullish follow through on Monday.

If stocks broke above he day 27 high of 4718.50, that would have shifted the odds of stocks entering a melt-up phase. However, stocks closed lower on the day. Monday was day 30 for the daily equity cycle, placing stocks in their timing band for a DCL.  Any bearish follow through should send stocks to complete their daily cycle decline. Stocks should break below the day 27 low of 4630.66 and turn the 10 day MA lower in order to complete its daily cycle decline. This would allow stocks to backtest the 4545.85 breakout level and allow sentiment to cool off. Which would set stocks up to emerge from a DCL heading into the most bullish time of the year. 

Miner Stop

The Miners have been contained by the 200 day MA since losing it in June. 

The Miners broke above the 200 day MA on Wednesday and delivered some bullish follow through on Thursday. Closing above the 200 day MA indicates a change in trend and stops can be raised to the 200 day MA. The Miners are currently in a daily uptrend.  The Miners will remain in their daily uptrend unless they close back below the lower daily cycle band. 

Bullish Follow Through

Stocks have broken above the previous all all time highs.

Stocks are delivering bullish follow through on the breakout of the 4545.85 level which could trigger a melt-up phase. However, I suspect that a daily cycle decline will backtest the breakout level before the we see the melt-up phase.

Stocks are currently getting stretched above the 10 day MA. At 25 days, stocks are 5 days shy of their timing band for a DCL. A daily cycle decline would allow stocks to backtest the breakout level and allow sentiment to cool off. This would also allow stocks to emerge from a DCL heading into the most bullish time of the year.

Bullish Follow Through

Stocks continued higher on Tuesday.

Tuesday was day 21 for the daily equity cycle. The new high on day 21 shifts the odds towards 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.

Stocks Deliver Buy Signal

After breaking out to new all time highs on Tuesday, stocks backtested the breakout level on Wednesday.

After emerging from the ICL stocks have begun closing above the upper daily cycle band indicating that they are in a daily uptrend. Forming a swing low above the upper daily cycle band signals a continuation of the daily uptrend and triggers a cycle band buy signal.

The decline into the ICL has stretched the ‘elastic band’ lower. If stocks deliver bullish follow through on the backtest of the 4545.85 level then that could trigger a melt-up phase.

Stocks Deliver Bullish Follow Through

We discussed last week that stocks needed to close above the declining trend line to confirm the new daily cycle.

Stocks closed convincingly above the declining trend line on Thursday then deliverered bullish follow through on Friday and Monday to close above both the 50 day MA and the upper daily cycle band. Closing above the upper daily cycle band ends the daily downtrend and begins a new daily uptrend. Closing above the upper daily cycle band also indicates that the intermediate cycle low has been set.

The decline into the ICL has stretched the ‘elastic band’ lower. A quick recovery of the all time highs could trigger a final melt-up phase.

Stocks Confirm New Daily Cycle

Stocks formed a swing low on Wednesday.

Stocks delivered bullish follow through on Thursday by closing above the converging 10 day MA and 50 day MA to confirm the new daily cycle. Stocks should go on to break above the declining trend line as they rally out of their DCL.

It is quite likely that Monday was not only the DCL but the intermediate cycle low (ICL) as well. And if stocks can quickly break out to new highs then that may trigger a final melt up.

The Miners Were Close — But No Cigar

Since printing the day 54 low, the Miners had been coiling below the 10 day MA until Wednesday.

The Miners closed above the 10 day MA on Wednesday. They delivered bullish follow through on Thursday by closing above the upper daily cycle band to signal that day 54 was the DCL.  Closing above the upper daily cycle band signals a new daily uptrend. The Miners are close, but no cigar. The Miners will need to break above both the 200 day MA and the 50 day MA in order for a trending move to develop.