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.  

Bonds Bounce Back

Bonds regained the 10 day MA on Thursday.

Wednesday was day 15 for the daily bond cycle. Bonds will need to break above the day 6 high of 150.40 in order to shift the odds towards a right translated daily cycle formation.  That aligns with bonds being in a daily uptrend.  Bonds will remain in their daily uptrend unless they close below the lower daily cycle band. 

Bullish Expectations

Stocks are in a new daily cycle and, as I discussed in the Weekend Report, in a new intermediate cycle as well.

Stocks are approaching their previous daily cycle high. With stocks being a bit stretched above the 10 day MA, this is a likely point to see some profit taking and perhaps see stocks form a half cycle low. However, the expectation for the first daily cycle of a new intermediate cycle is to see the cycle right translate. A right translated daily cycle should peak after day 20. Stocks are in a new daily uptrend. They will remain in their daily uptrend unless they close below the lower daily cycle band.

A Miner Trend Change

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The Miners were down again today. They have been down 7 of the past 10 days.
Despite that, it looks as if the Miners are about to have a change of trend.

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The Miners last printed a right translated daily cycle low on 9/26/12. Since then they have formed 8 consecutive left translated, failed daily cycles. These cycles were characterized by all peaking on day 10 or earlier, most of them peaked by day 6. What is significant that the current daily cycle peaked on day 18, virtually locking in a right translated nature to this daily cycle.

There is other evidence of a change in trend is surfacing.

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First off you will notice that MACD formed a higher low while the Miners were printing their yearly low in late July.

Second, I want to draw your attention to the amount of time that the Miners have closed above the 20 MA. There was three days late December into early January. Then there was really nothing until the Miners closed for 5 days above the 20 MA in late March. May into June saw the Miners close above the 20 MA for 8 straight days. Then, of course, there is the current daily cycle that saw the Miners close above the 20 MA for 13 days.

Now I want to back out to a view of the monthly chart.

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Here is the monthly miner chart dating back to 2007. Below it is the monthly True Strength Index. Only four times since 2007 has there been a bullish crossover on the monthly TSI, indicating a monthly change in trend. I have notated these and shown how much the Miners rallied after printing the bullish TSI crossover.

You will notice that the monthly TSI is about to deliver another bullish crossover.

Now, let’s go back and take a closer look at the current daily cycle.

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As previously mentioned, this cycle peaked on day 18 and now stands at day 27. Since September only 1 daily cycle stretched past 24 days and that one ran 28 days. So the Miners should print a daily cycle low any day now. Assuming that the right translated nature stays intact, then that sets up an expectation for the next daily cycle to go on to make a higher daily cycle high, confirming a new trend.

Since a lower low was printed today, tomorrow will be the earliest a swing low can form. A break above 238.75 forms a swing low.

A once that swing low forms, that will likely present a golden buying opportunity…

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Dominos …

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The markets did not do too much today except advance their respective daily cycle counts in anticipation of this week’s Fed meeting.

And I think that the dollar’s reaction will be the domino to set things in motion.

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Monday was day 28 for the dollar’s daily cycle. The daily cycle peak came at day 14. So by printing a lower low on Monday means that the earliest that a swing low can form will be Tuesday. Also by pushing the cycle count out to day 28 has shifted this daily cycle from being right translated in nature to being neutral. A lower low for the buck on Tuesday will once again shift the nature of the cycle to being left translated.

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The daily cycles for both gold and the Miners peaked last Tuesday and has since trended lower and now are testing their daily cycle trend lines. Both can still go higher, but will likely be short lived since they both are in the timing band to print a daily cycle low. A break of the daily cycle trend line signals the daily cycle decline has begun. The dollar rallying out of a daily cycle low is likely to knock them into a daily cycle decline. The bearish crossover on the TSI suggest that perhaps the daily cycle decline has already started.

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The daily equity cycle sits at day 24. A break above 1698.78 will likely extend this daily cycle out into the 45 day range. But should stocks sell off on a rallying dollar then a break of 1676.03 confirms that the daily cycle is in decline.

So until the dollar busts a move, it seems that we will be treading water …

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The 7/26/13 Weekend Report Preview

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Weekend Report
Monday was day 27 for the daily dollar cycle and the dollar made another lower low.

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The timing band for a low runs from day 18 through the 28th so the dollar is pushing to the later part of its timing band. A swing low at this point has a good likelihood of marking the daily cycle low. A break above 81.82 will form a swing low.

The daily cycle sports a day 14 peak. Should the dollar continue lower next week that could change the nature of this daily cycle from right translated to left translated. Most 1st daily cycles form as right translated cycles. I would not surprise me in the least if this daily cycle ends up as a left translated cycle because that dovetails into my longer term expectations for the buck.

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Looking at a longer time frame we can see how the dollar is sitting at an important pivot level. So the dollar is in the later stages of its timing band for a DCL and sitting on a pivot zone. I think that it is likely to see the dollar break below that zone before reversing in order to trap the dollar bears.

Stocks
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The daily equity cycle peaked on Monday, day 20. A swing high formed and stocks drifted lower into Friday.

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Stocks printed a bullish reversal on Friday. Stocks appears to have back-tested the breakout level from the previous intermediate cycle high. A break to a new daily cycle high signals that Friday was a half cycle low. A break below Friday’s low signals a daily cycle decline.

The entire Weekend Report can be found at Likesmoney Subscription Services

The Weekend Report discusses Dollar, Stocks, Gold, Miners, The CCI Index, & Bonds in terms of daily, weekly and yearly cycles.
Also included in the Weekend Report is the Likesmoney CycleTracker

To subscribe: http://likesmoneysubscriptionservices.wordpress.com/

For subscribers: the full Weekend Report can be found at Likesmoney Subscription Services at http://likesmoney.wordpress.com/

A free sample report can be found here: http://likesmoneystudies.wordpress.com/

Dollar Bounce …

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Unless the dollar can break above Thursday’s high of 82.68, this is just a dead count bounce for the dollar.

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The dollar’s daily cycle peaked on May 23 and has been in decline. Last Thursday it broke below the previous daily cycle low, signaling a failed daily cycle. Then the dollar printed a reversal on Friday. Monday saw the dollar provide some follow through to the reversal printed on Friday. But the dollar was halted by the declining cycle trend line. Unless the dollar breaks lower, the dollar would need break above Thursday’s high of 82.68 to form a daily swing low, signaling a new daily cycle.

Like the dollar, Stocks also printed a reversal on Thursday.

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Stocks did break above the declining cycle trend line on Friday declaring it day 1 of a new daily cycle. Monday was day 2 and we see stocks running into resistance at the 1650 level. If stocks and the dollar maintain their recent correlation, then we may see the dollar break above its declining trend line joining stocks in a new daily cycle.

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Monday was day 13 for the daily gold cycle and gold is not ready to show its hand. Gold could be moving into a daily cycle low or simply pausing before one more surge higher.

Our cycle methodology expects gold to print a higher daily cycle high following a right translated daily cycle. An exception to that would be if gold forms a triangle consolidation. And at this point either scenario is possible.

Once gold has re-established its bullish trend then it should start producing bullish resolutions or upside surprises.

Palladium provided a bullish resolution today.

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Pallidum has been leading precious metals and continues to provide leadership …

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For this week I will offer a 1 month trial subscription of the Weekend Report.
$15 for one month allows you access to the entire Likesmoney Weekend Report Suite.

Included is the Weekend Report Suite:
My notebook on Miner Studies, Dollar Studies, Equities Studies, and Corn Studies
There is also my proprietary FAS Buy/Sell Indicator and the Bullish Percent Index Bingo

Click here for to signup for a 1 month trial:

https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=KBYHDKHFX66WG

For subscribers: the full Weekend Report can be found at Likesmoney Subscription Services at http://likesmoney.wordpress.com/

Major Opportunity for Miners

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The daily Miner cycle peaked on Monday, which was day 9. Then they traded sideways until Thursday where they tested the declining 50 MA.

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Friday was a clear rejection and it looks like the Miners heading into a daily cycle low. We are likely to see the Miners fill the gap at 263.84 during this correction. If this is a daily cycle correction, then the Miners will need to print a daily cycle low before day 18 in order to avoid forming as a left translated daily cycle.

In the short term we can expect a daily cycle correction for the Miners. But I believe a major opportunity is just around the corner. The signal is when the Miners confirm a new yearly cycle.

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May was month 12 for the yearly Miner cycle. A monthly Doji formed along with a monthly Bollinger Band breach. This very likely marked the yearly cycle low. A break above 291.07 forms a monthly swing low. And a break above the declining monthly trend line confirms a new yearly cycle.

The Gold Miners Bullish Percent Index recently printed a double bottom.

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The BPGDM has never printed a double zero percent reading before. It has printed a single zero percent reading one other time …

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And lets see how the Miners responded …

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So I mentioned earlier that currently the monthly Miner’s chart printed a monthly Bollinger Band crash which is in the timing band for a yearly cycle low. Let’s look at otherr times that the Miners had a monthly Bollinger Band crash in the timing band for a yearly cycle low.

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Looking at the past 15 years there are only 3 other times the Miners had a monthly Bollinger Band crash. They just happen to coincide with the three year cycle lows. The resulting rallies from these lows coupled with a monthly Bollinger Band crash tacked on anywhere from 142% to 338%.

And let’s look at one other indicator.

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The monthly Trend Strength Indicator indicates when something is oversold or overbought. Looking at the monthly chart for the Mines above we see that the monthly TSI has been this oversold only twice before. The first time saw a gain of 546% and the second time at this level saw the Miners gain 324%.

So by looking at three different indicators we see that the Miners are historically oversold. And each one of these indicators marked levels close to or at the bottoms where the results were triple digit rallies.

If the Miners haven’t bottomed,they are close.
Once a monthly swing low does print, I think that will turn the switch…

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For this week I will offer a 1 month trial subscription of the Weekend Report.
$15 for one month allows you access to the entire Likesmoney Weekend Report Suite.

Included is the Weekend Report Suite:
My notebook on Miner Studies, Dollar Studies, Equities Studies, and Corn Studies
There is also my proprietary FAS Buy/Sell Indicator and the Bullish Percent Index Bingo

Click here for to signup for a 1 month trial:

https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=KBYHDKHFX66WG

For subscribers: the full Weekend Report can be found at Likesmoney Subscription Services at http://likesmoney.wordpress.com/

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The 6/07/13 Weekend Report Preview

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The dollar’s daily cycle began on May 1 st and peaked on day 16. Thursday saw the dollar break below the May 1st low which makes this a failed daily cycle.

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If Thursday remains as the daily cycle low, then the dollar would need to break above 82.68 in order to form a swing low. Since the dollar is getting late in its timing band, a swing low now has a good chance to mark the daily cycle low. A break of the declining trend line would confirm a new daily cycle

Since a failed daily cycle signals that the intermediate cycle decline has begun, we can expect the next daily cycle form as a left translated daily cycle. Which means is should peak quickly, on or before day 8.

It is very rare (and bearish) for a new intermediate cycle to have its first daily cycle fail. I think that this speaks volumes to problems with the dollar.

Stocks
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The daily cycle peaked on day 24 and has been in decline since. Thursday, day 34, stocks printed a reversal candle and tagged the intermediate cycle trend line. Friday a swing low formed along with a break of the declining trend line. That makes Friday day 1 of a new daily cycle.

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This is the fifth daily cycle to the current intermediate cycle. Intermediate cycles tend to be comprised of 3 – 4 daily cycles. This is very likely going to be the terminal daily cycle to this intermediate cycle. Therefore our expectation will be for stocks to peak on or before day 20 before rolling over into an intermediate cycle low. This will also likely result in a yearly cycle low.

Our cycle methodology has an expectation of a higher high following a right translated cycle. While I do believe that we will see equities break above the 1700 level before correcting, we need to keep an open mind to other possibilities.

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During last year the final daily cycle did follow a right translated daily cycle. But it failed to print a higher daily cycle high before rolling over into a yearly cycle decline.

The entire Weekend Report can be found at Likesmoney Subscription Services

The Weekend Report discusses Dollar, Stocks, Gold, Miners, The CCI Index, & Bonds in terms of daily, weekly and yearly cycles.
Also included in the Weekend Report is the Likesmoney CycleTracker

To subscribe: http://likesmoneysubscriptionservices.wordpress.com/

For subscribers: the full Weekend Report can be found at Likesmoney Subscription Services at http://likesmoney.wordpress.com/

A free sample report can be found here: http://likesmoneystudies.wordpress.com/

SPX — Looking Ahead


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Tuesday was day 32 for the daily equity cycle. And stocks did form a swing low as we suspected.

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At 32 days, equities are still early enough in their timing band for further downside. Having acknowledge that, if stocks break above the declining trend line that will mark a new daily cycle, which will be the 5th daily cycle for the current intermediate cycle

This kind of reminds me of the previous yearly cycle. Where this current weekly cycle began in November, the previous yearly cycle saw stocks begin to rally in October.

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Notice how all of the daily cycle corrections ranged between 30 and 64 points.

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One quick observation is that the 5th daily cycle followed a right translated cycle but did not print a higher high …

So we see that both intermediate cycles began late in the calendar year. The daily cycle correction ran between 30 & 64 points. Both extended into a fifth daily cycle.

A significant difference is that the 10/2011 – 6/2012 rally ended in a yearly cycle low.
This current rally is due for not only a yearly cycle decline, but a four year decline as well.

Now if you thought last summer’s 155 point (10.9%) drop was nasty …

A four year low will make that look like a pony ride …


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