Bullish Signal

Stocks delivered a bullish signal on Monday.

Stocks formed a bullish RSI reversal on Monday.

Stocks have been in a daily uptrend that has been characterized by highs occurring above the upper daily cycle band and lower forming above the lower daily cycle band. Another characteristic is having RSI become embedded in overbought. Monday’s quick bullish RSI reversal is a signal that stocks will resume their daily uptrend. Stocks did form a swing low on Monday. A close above the 10 day MA will indicate a continuation of the daily uptrend and trigger a cycle band buy signal.

Oil Game Changer

Oil dropped over 13% on Friday to extend its daily cycle decline.

Oil printed its lowest point on Friday, day 67, placing oil very deep in its timing band for a DCL. At this late stage of the daily cycle, a swing low and close back above the 200 day MA will have good odds of marking the DCL.

 So, while oil could potentially begin a new daily cycle next week, Friday’s huge drop is a game changer that will likely send oil into an intermediate and yearly cycle decline. Which I further discuss in the Weekend Report.

Stocks Ready To Cross The Line

At 35 days and printing a bearish reversal on Monday, stocks should be seeking out their DCL.

Instead stocks printed a bullish reversal on Tuesday then formed a swing low on Wednesday. Notice that the 10 day MA is beginning to turn higher. This is looking more and more like this maybe all the correction we will see. Stocks are currently in a daily uptrend. A close above the day 24 high of 4718.50 will indicate a continuation of the daily uptrend and trigger a cycle band buy signal. Stops could then adjusted to 4718.50.

Waiting For Stocks To Cross The Line

The Dow Jones Industrial is seeking out its DCL.

The Dow broke below the daily cycle trend line, turned the 10 day MA lower, and is in its timing band for a daily cycle low. And Thursday’s bullish reversal eases the parameters for forming a daily swing low. A swing low and break above the declining trend line will signal a new daily cycle.

It’s questionable if day 27 represents a DCL for the Nasdaq. However, the tech heavy Nasdaq is breaking out to new highs. The Nasdaq is currently in a daily uptrend. Breaking out to a new high signals a continuation of the daily uptrend and triggers a cycle band buy signal.

The broader S & P has been consolidating for almost the past 2 weeks. A break below the day 27 low of 4630.66 should see stocks complete their daily cycle decline. But with the Nasdaq breaking out to new highs, it is possible for the S & P to follow. A break above the day 27 high of 4718.50 will shift the odds of stocks entering a melt-up phase and stops should then be raised to the new breakout level.

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 Confirmation

The Miners formed a bullish engulfing candle on Wednesday.  

The Miners printed their lowest point on Wednesday, day 25, placing them in their timing band for a DCL. Wednesday’s bullish engulfing candle closed back above the 50 day MA which may have marked the DCL. While the Miners formed a swing low on Thursday, we really need to see a close above the declining trend line to signal the new daily cycle.

Then the Miners will need to close above the 200 day MA in order for a trending move to develop.

Potential Miner Buy Signal

The Miners formed a bullish reversal on Monday.

Monday was day 23 for the daily Miner cycle. That places the Miners in the early part of their timing band for a daily cycle low. The Miners retraced to the 50% fib level then formed a bullish reversal off support from the 50 day MA. That eases the parameters for forming a daily swing low. A break aboveh 32.01 will form a swing low. The Miners are in a daily uptrend. If they form a swing low above the lower daily cycle band then they will remain in their daily uptrend and trigger a cycle band buy signal.

The 10/09/21 Weekend Report Preview

The Dollar

The dollar peaked on day 18 and has since consolidated above the breakout from the previous daily cycle high.

Friday was day 24, placing the dollar in its timing band for a DCL. The weekly chart shows us that the dollar is running into resistance at the 200 week MA. A close below the 10 day MA will signal the daily cycle decline. The 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 printed their lowest point on Monday, day 31, placing them in their timing band for a DCL. 

Stocks formed a swing low on Tuesday then closed above the 10 day MA on Thursday to signal the new daily cycle. Stocks should go on to break above the declining trend line as they rally out of the DCL. Stocks are in a daily downtrend. They will remain in their daily downtrend unless they can close back above the upper daily cycle band. 

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Gold Signals New Daily Cycle

Gold printed its lowest point on day 36 to place it deep in its timing band for a DCL.

Gold formed a swing low and closed above the 10 day MA on Thursday. On Monday closed above the declining trend line to signal a new daily cycle. Gold is still contained by both the 50 day MA and the 200 day MA. Gold needs to close above both these MA’s in order for any rally to be sustained.

Bullish Reversal

Stocks formed a bullish reversal on Friday.

Stocks broke below the day 21 low on Friday to extend their daily cycle decline. Friday was day 30, placing stocks in their timing band for a DCL. Friday’s bullish reversal eases the parameters for forming a swing low. A break above 4375.19 will form a swing low. Then a close above the 10 day MA will signal the new daily cycle. Stocks are in a daily downtrend. They will remain in their daily downtrend unless they can close back above the upper daily cycle band.  

In the Weekend Report I discuss why I expect this to be not only a daily cycle low, but an intermediate cycle low as well. And what I am looking for to signal a final melt-up phase to this bull run.

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