The 10/20/17 Weekend Report Preview

The Dollar
$$$

The dollar closed back above the upper daily cycle band on Friday to confirm that day 24 hosted the DCL which makes Friday day 5 of the new daily cycle.

The dollar established a daily uptrend prior to the drop into the daily cycle low. By closing back above the upper daily cycle band on Friday affirms the daily uptrend. The dollar will remain in its uptrend until it closes below the lower daily cycle band.

Stocks
stocks

Stocks formed a swing low on Friday and appear to have begun a new daily cycle.

A decline into a daily cycle low normally lasts 7 to 15 days. The peak on day 40 is an extremely right translated daily cycle formation which does not leave much time in the normal timing band for a normal daily cycle decline. We also discussed how the behavior of previous 2 intermediate cycle has changed because they did not produce a failed daily cycle. Unless proven otherwise this change in behavior is filtering down to the daily cycle level as evidenced by the 1 day decline into a daily cycle low.

Part of our evidence that stocks printed a 1 day daily cycle decline is that both the Russell and the transports delivered a more recognizable daily cycle decline. All three have formed swing lows and closed back above their respective 10 day MA’s to signal new daily cycles. Stocks are in a daily uptrend. They will continue in their daily uptrend unless they close below the lower daily cycle band.

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The Weekend Report discusses Dollar, Stocks, Gold, Miners, Oil, & Bonds in terms of daily, weekly and yearly cycles.
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Right Translation

The S&P, the Russell and the Transports are all forming right translated daily cycles. Right translated daily cycles trend higher in a stair step fashion.

All 3 are getting late in their timing bands for a daily cycle low. Both the Russell and the transports have delivered a recognizable correction while the S&P has only formed a swing high. If there has been a change in character, as we discussed here, then we may not see much in the way of a correction for the S&P. However, all three remain in a daily uptrend. So if a swing low forms above the lower daily cycle band the correction strategy is to buy the dip. That is because once an asset is in a daily uptrend, they will remain so until they close below the lower daily cycle band.

Energy stocks have also formed a right translated daily cycle.

XLE peaked on day 27 and has since been slowly working its way into its daily cycle low. A peak on day 27 assures us of a right translated daily cycle formation. XLE printed its lowest point on Thursday, following the day 27 peak. That places XLE deep in its timing band for a DCL. At this point a swing low and close back above the 10 day MA will confirm a new daily cycle. XLE has begun a new daily uptend. It will continue in its uptrend until it closes below the lower daily cycle band.

The 10/13/17 Weekend Report Preview

The Dollar
$$$

Friday’s bullish reversal at support off the 50 day MA sets up for a daily cycle low to form. 

The dollar printed its lowest point on Friday, day 24.  That places the dollar in its timing band for a daily cycle low. Friday’s bullish reversal off of support from the 50 day MA eases the parameters for forming a daily swing low.  A  break above 93.09 forms a daily swing low.  A close back above the 10 day MA will indicate a new daily cycle. The dollar is in a daily uptrend & will remain so unless it closes below the lower daily cycle band. 

Stocks
stocks

Stocks continued higher printing a new high on Friday, day 37.


 

Stocks are in their timing band for a seeking a DCL.  At this point a swing high and close below the 10 day MA will signal the daily cycle decline.  Stocks continue to close above the upper daily cycle band to indicate a daily uptrend.  Stocks will remain in their uptrend until they close below the lower daily cycle band. 

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 Signals A New Daily Cycle

Oil printed its lowest point on Monday, which was day 25. That is 5 days shy of the normal timing band for a daily cycle low. However, oil is giving every indication that a daily cycle low has formed.

The decline into the day 25 low caused oil to deliver a 50% fib retracement, which we can see at a DCL. Oil then formed a swing low on Tuesday and delivered more bullish follow through on Wednesday causing oil has closed back above the 10 day MA. Oil also has closed above the upper daily cycle band to indicate that it continues in its daily uptrend. Oil will remain in its daily uptrend unless it closes below the lower daily cycle band.

Equity Timing Band

Tuesday was day 33 for the daily equity cycle. That places stocks in their timing band to seek out a daily cycle low.

Stocks printed their daily cycle high last Thursday, day 31, which assures us of a right translated daily cycle formation. But stocks have since closed lower for 2 straight days, which eases the parameters for forming a daily swing high. A break below 2450.02 forms a swing high. Then a break below the daily cycle trend line will confirm that stocks are in a daily cycle decline.

Stocks continue to close above the upper daily cycle band indicating that they are in a daily uptrend. As long as stocks form a swing low above the lower daily cycle band, then stocks will remain in their daily uptrend. And under that scenario, the dip should be bought.

The transports have already confirmed their daily cycle decline.

Tuesday was day 31 for the transports daily cycle. That places them in their timing band to seek out a daily cycle low. The transports have already formed a swing high and broke below the daily cycle trend line to confirm that they have entered their daily cycle decline. The transports have also been in a daily uptrend. They will remain so unless they close below the lower daily cycle band.

Oil Delivers A Buy Signal

Oil delivered a buy signal on Thursday.

There is a little uncertainty if day 23 represents an early DCL or was it a half cycle low. However what is certain is that oil had been closing above the upper daily cycle band prior to this dip into the day 23 low. Oil formed a swing low and closed back above the upper daily cycle band on Thursday to indicate that oil remains in it its daily uptrend. And a swing low in a daily uptrend is a buy signal. Oil will remain in its daily uptrend until it closes below the lower daily cycle band.

A Miner Low

0 miner surprise

The Miners formed a daily swing low on Tuesday.

Tuesday’s swing low formed off of the day 59 low, which places the Miner very deep in their timing band for a daily cycle low. Therefore Tuesday’s swing low has good odds of being the day 1 of the new daily cycle.

There are other indicators that signal Tuesday was day one of the new daily cycle. First off the Miners formed a swing low off of support for the 200 day MA. Another signal is that the Miners closed above the lower daily cycle band. There is also bullish divergences developing on the daily oscillators that we see at cycle lows. Now we need to see a close above the declining 10 day MA to confirm Monday as the daily cycle low.

Assuming that the Miners confirm the new daily cycle, what is happening with the dollar will likely cause headwinds for the Miners.

The dollar has formed a monthly swing low off the month 16 low. That places the dollar deep in its timing band for a yearly cycle low. So the monthly swing low has a good chance of marking the yearly cycle low, meaning that the dollar is beginning a new yearly cycle. And the dollar emerging into a new yearly cycle will likely have a deflationary effect on the Miners.

Bullish Backtest

Stocks formed a swing low on Tuesday.

If stocks can deliver some bullish follow through then we will label Monday as a half cycle low.

Monday was day 24 for the daily equity cycle. Stocks backtested the previous intermediate cycle top on Monday. If stocks deliver any bullish follow through that would indicate a successful backtest allowing us to construct the daily cycle trend line. Stocks continue to close above the upper daily cycle band indicating that there are in a daily uptrend. They will remain in their daily uptrend unless they close below the lower daily cycle band.

Smoke ’em if you got ’em

The Miners delivered a swing low on Monday

The Miners printed their lowest point on Thursday, which was day 52. The Miners came close to printing a swing low on Friday, but no cigar. The Miners only had 1 daily cycle longer than 52 days over the past 2 years, which occurred in March at 53 days.

So Monday’s swing low has very good odds of marking the daily cycle low. A close above the 10 day Ma will confirm the new daily cycle.

On Sunday I discussed my reservations of the Miners for this new daily cycle. Having stated that I now want make some observations:

1) A swing low deep in the timing band for a daily cycle low is a buy signal.
2) Since the Miners are in a weekly uptrend, there exists the possibility of a bullish surprise.

Close, But No Cigar

The Miners came close to forming a daily swing low on Friday.

Close, but no cigar …

The Miners rallied on Friday to gain 1.12% on the day. While the Miners failed to form a daily swing low, they did regain the 50 day MA and close above the lower daily cycle band delivering the first signals that day 52 hosted the daily cycle low.

So a swing low has good odds of forming the daily cycle low, which is a buying signal. But there are some signals developing that indicate that the Miners have begun an intermediate cycle decline.

The Miners closed below the lower daily cycle band Thursday and Friday, which signals the start of the intermediate cycle decline. On the weekly chart we can see that the Miners have formed a weekly swing high and delivered a break below the weekly trend line. Both of which indicate that the Miners are in an intermediate cycle decline. And this is before the dollar beings to rally out of its intermediate cycle low.

The dollar printed its lowest point on week 31, placing it deep in its timing band for an ICL. So while a new daily dollar cycle has begun, the dollar still needs to form a weekly swing low and break above the declining weekly trend line to confirm a new intermediate cycle. And if the dollar’s intermediate rally begins to develop some traction, that will surely send the Miners lower.