Stocks ran into resistance at the declining trend line on Monday.
Stocks have been halted by the declining trend line since late March. Stocks are currently in a daily downtrend. If stocks are rejected by the declining trend line and form a swing high, that would indicate a continuation of the daily downtrend and signal a cycle band sell signal.
The Miners have dropped over 34 % since peaking in April.
The Miners are in a 3 month downtrend and sentiment is bearish. However, the Miners printed a bullish reversal on Friday.
Friday was day 34 for the daily Miner cycle, placing them in their timing band for a DCL. Friday’s bullish reversal eases the parameters for forming a daily swing low. A break above 28.37 will form a swing low. Then a close above the declining 10 day MA will signal the new daily cycle.
The best time for the largest gains arrive at the yearly cycle low. In my special report, Miner Anticipation, I will break down where the Miners are in the daily, weekly and yearly cycles. I will include the confirmations that I am looking and the catalyst to set this all into motion — which I breakdown in my Special Report: Miner Anticipation.
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Stocks formed a swing low and closed back above the 10 day MA on Friday.
While Friday’s develop is encouraging that day 19 was the DCL, stocks remain below the 50 day MA and is in a daily downtrend.
The Nasdaq also had a bullish Friday but remain below both the 10 day MA and the 50 day MA.
The Dow formed a swing low and closed back above the 10 day MA on Friday. But remains below the 50 day MA and is in a daily downtrend.
The Russell also formed a swing low and closed back above the 10 day MA on Friday. But still remains below the 50 day MA and is in a daily downtrend.
I discuss in the Weekend Report how stocks appear to have formed their daily cycle low, intermediate cycle low and is in the process of forming the yearly cycle low. This decline into the YCL has been difficult and sentiment became very bearish. We need to keep in mind the best opportunity for gains follow a yearly cycle low — which appears to be forming. And Biotech is the early leader of the pack
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.
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.
The Miners broke bearishly out of its coiling pattern on Thursday.
The Miners are currently in a daily downtrend. Breaking bearishly out of its coiling pattern indicates a continuation of the daily downtrend and signals a cycle band sell signal. However, that all changed on Friday.
The Miners printed a huge bullish engulfing candle on Friday. A close back above the 200 day MA would complete a reversal of the bearish breakdown and should result in a trending move — which we would then label day 20 as the DCL.
With stocks in their timing band for both an intermediate and yearly cycle low, the odds were good that the late May cycle low would mark a new weekly and yearly cycle low. So if day 60 was the intermediate/yearly cycle low then the first daily cycle out of that low should right translate. However stocks formed a swing high on Thursday. And with a potential peak on day 8 — that would indicate a left translated daily cycle formation.
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 signals a cycle band sell signal.
We discussed last last week how the Miners needed to close above the 200 day MA in order for a trending move to develop. The Miners did close above the 200 day MA last Thursday. However, they lost the 200 day MA on Friday and then closed below the 10 day MA on Monday, forming a daily swing high. The Miners 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.
The dollar found support at the 50 day MA on Tuesday.
The dollar printed its lowest point on Tuesday, day 42, placing placing the dollar very deep in its timing band for a DCL. Wednesday’s swing low and close above the 10 day MA signals the new daily cycle. Notice that the RSI 05 pattern is changing – which indicates that the dollar is beginning the declining phase of its intermediate cycle. That aligns with the dollar being in a daily downtrend. The dollar will remain in its daily downtrend unless it closes back above the upper daily cycle band.
The rally out of the day 60 DCL had stocks close back above the lower trend line of the megaphone pattern.
Stocks spent the past week consolidating above the lower trend line.
This consolidation is allowing the 10 day MA to catch up to price. The weekly cycle indicates that this should be the 1st daily cycle of the new intermediate cycle. If so, then this daily cycle should break above the 50 day MA to form as a right translated daily cycle.