Stocks Running Into Resistance

Stocks printed a new daily cycle high on Monday. The new high on day 29 locks in a right translated daily cycle formation.

At 29 days, stocks are in the early part of their timing band for a DCL. Stocks are getting stretched above the 10 day MA and they are running into resistance at the 4150 level. If stocks can break through this resistance then there is little to stop them for testing the 200 day MA. But, rejection by the 4150 resistance level would signal the daily cycle decline. Stocks are currently in a daily uptrend.  Stocks will remain in their daily uptrend unless they close below the lower daily cycle band.  

Miner Progress

On Tuesday we discussed that there is a major opportunity for the Miners. Tonight we will look at the Miner progress.

The Miners formed a swing low and closed above the 10 day MA on Wednesday. The Miners delivered bullish follow through on Thursday by closing a full candle body above the 10 day MA so we will label day 50 as the daily cycle low.

In the Weekend Report I plan to breakdown how the Miners are overdue for the intermediate and yearly cycle lows, as well. And forming a swing low could indicate not only the DCL, but the ICL and YCL as well. 

Miner Risk for Major Opportunity

The Miners were rejected by the 10 day MA on Friday. They went on to undercut the day 43 low on Monday to extend its daily cycle decline.

Monday was day 50 for the daily Miner cycle, making it severely overdue for a daily cycle low. After undercutting the low, the Miners could have easily went on to a 5 to 7 day bloodbath phase. But instead, they printed a bullish inside candle. That eases the parameters for forming a daily swing low. A break above 25.42 will form a swing low, Then a close above the declining 10 day MA will have us label day 50 as the DCL.

In the Weekend Report I plan to breakdown how the Miners are also overdue for the intermediate and yearly cycle lows, as well. There is a minor risk that the Miners will break below the day 50 low of 24.66 to extend its daily cycle decline. But if the Miners form a swing low, that could indicate not only the DCL, but the ICL and YCL as well.

False Breakout On Bonds

Bonds broke out to a new daily cycle high on Friday, but then lost the breakout out on Monday.

Monday was day 25 for the daily bond cycle, placing it in the early part of its timing band for a daily cycle low. Losing the breakout indicates that bonds are feeling the gravitational pull of the pending DCL.

If bonds delver bearish follow through and close below the 10 day MA that would indicate the daily cycle decline. Bonds are currently in a daily uptrend. If bonds form a swing low above the lower daily cycle band then they will remain in their daily uptrend and signal a cycle band buy signal.

The 7/23/22 Weekend Report Preview

The Dollar

The dollar closed below the 10 day MA on Monday then continued lower through Friday.

Friday was day 18 for the daily dollar cycle, which places the dollar in the early part of its timing band for a DCL. The dollar really needs to turn the 10 day MA lower to signal the daily cycle decline. However, the dollar is currently in a daily uptrend. If the dollar forms a swing low above the lower daily cycle band then it will remain in its daily uptrend and signal a cycle band buy signal — in which we would label day 18 as a half cycle low. A break above 107.25 will form a daily swing low.

Stocks

Stocks closed above the declining trend line on Tuesday, then continued higher through Friday.

The new high on day 23 assures us of a right translated daily cycle.  Stocks are a bit stretched above the 10 day MA and may crawl along the 50 day MA to allow the 10 day MA to catch up to price.  However, a close below the converging 10 day MA and 50 day MA would signal the daily cycle decline.  Stocks are currently in a daily uptrend.  They will remain in their daily uptrend unless they close below the lower daily cycle band. 

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Weekly Swing Low

Stocks closed above the declining 10 day MA on Thursday then delivered bullish follow through on Friday to signal that day 19 was an early DCL.

Stocks printed their lowest point the previous week, which was week 36, placing them very deep in their timing band for an intermediate cycle low. Stocks formed a weekly swing low this week. Only 1 time in the last 13 years did an intermediate cycle exceed 32 weeks. So the odds are high that this weekly swing low signals the new intermediate cycle. We still need to see a close above the declining 10 week MA in order to label week 36 as the ICL. Stocks are currently in a weekly downtrend. They will remain in their weekly downtrend unless they can close back above the upper weekly cycle band.

 In the Weekend Report I will breakdown what this means for the longer term, yearly cycle.

Stocks: Bullish Development But Still Need To Cross The Line

Stocks closed above the declining 10 day MA on Thursday

Stocks printed their lowest point on Friday, day 19, which is very early for a DCL. But with the previous daily cycle being stretched at 60 days, a shortened daily cycle would help to balance out the cycle counts.  We will Thursday’s close above the 10 day MA to label day 19 as an early DCL. Stocks still need to break above the 3943 resistance level and turn the 10 day MA higher to be assured that day 19 did, indeed, host an early DCL.

Risk/Reward

Stocks formed a swing low on Tuesday.

Stocks printed their lowest point on Friday, day 19, which is very early for a DCL. But with the previous daily cycle being stretched at 60 days, a shortened daily cycle would help to balance out the cycle counts.  The weekly cycle is also stretched, which increases the odds for an early DCL. Still, we will need to see a close above the declining 10 day MA, along with some bullish follow through to be assured that day 19 hosted an early DCL.

If Friday was the DCL, then a Tuesday entry provides the least risk of loss if stopped out. Waiting for more confirmation, such as recovering the 3943.42 break down level or a close above the 10 day MA provides more assurance that the DCL is set at the cost of a greater loss if stopped out at Friday’s low.

Miners Form Failed Daily Cycle

The Miners broke below the previous daily cycle low on Tuesday.

Breaking below the previous daily cycle low forms a failed daily cycle and extends the intermediate cycle decline. There are bullish divergences developing on the oscillators that often herald the cycle low. And with the Miners being in their timing band for an intermediate cycle low, the odds are good that once the DCL forms it will mark the ICL as well.

Failed Daily cycle

Stocks broke the previous daily cycle low on Monday.

Breaking below the previous DCL forms a failed daily cycle and extends the intermediate (weekly) cycle decline. At 15 days, stocks could trend lower for another 15 – 25 days before printing their DCL. Sentiment is very bearish and a technical level has been broken which would align with stocks declining for another 3 – 5 weeks.

The previous daily cycle ran long, so we could see a shortened daily cycle form here, which would balance out the cycle counts. Stocks are overdue for both a weekly and yearly cycle low. So if this undercut reverses quickly and closes above 3943.32, it could mark the daily, weekly and yearly cycle low.