Oil Confirms Daily Cycle Decline

Oil closed below both the 50 day MA and the daily cycle trend line on Monday to confirm that it is declining into its daily cycle low. Our intermediate and yearly cycle frameworks, as outlined in the Weekend Report, calls for both an intermediate and yearly cycle decline.

Monday was day 19 for oil’s daily cycle. The peak on day 11 indicates a left translated daily cycle formation. Since the daily oil cycle can run anywhere from 30 – 50 days, oil can trend lower for the next 2 – 6 weeks before printing its daily cycle low. And a break below the previous daily cycle low of 63.40 forms a failed daily cycle and confirms the intermediate cycle decline.

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The 7/13/18 Weekend Report Preview

The Dollar

The dollar closed above the declining trend line and 10 day MA on Wednesday to confirm the new daily cycle.

This is the 5th daily cycle for the current intermediate cycle. Therefore we are expecting a left translated daily cycle formation to trigger the intermediate cycle decline. Friday’s bearish reversal on day 4 indicates a left translated daily cycle formation. A break below 94.43 will form a daily swing high to signal the daily cycle decline.

Stocks

Stocks printed a new high on Friday, day 10.

While stocks printed a new high on Friday, there are bearish divergences developing on the oscillators. The status of the intermediate cycle has us expecting a left translated daily cycle formation. A swing high and a break below the daily cycle trend line would indicate that the daily cycle decline has begun. Stocks are in a daily uptrend. They will remain in their uptrend unless 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

Another Look at Emerging Markets

I believe that there is a long term opportunity unfolding in the Emerging Markets, which we began discussing on July 5th.

Emerging Markets, EEM, have formed a swing low and closed above the declining trend line to confirm that day 22 hosted the daily cycle low. And with EEM being in its timing band for an intermediate and yearly cycle low, the new daily cycle has good odds of triggering both the new weekly and new yearly cycle.

EEM has been in a multi year consolidation for over 10 years. It recently broke out of consolidation in December, peaked in January, and then began its yearly cycle decline. As previously mentioned, EEM is in its timing band for a YCL. EEM is rallying off of support from the rising 20 month MA. The decline into the YCL has caused EEM to back test the break out for the multi year consolidation. The formation of a monthly swing low will indicate that EEM has begun a new yearly cycle. And that is has also successfully backtested the multi year consolidation.

The Nasdaq recently broke out of is multi year consolidation and backtested its resistance level.

After the Nasdaq backtested its resistance level it was off to the races …

Emerging Markets Deliver Bullish Follow Through

Last Week we looked at the opportunity in the Emerging Markets. It appeared that the Emerging Markets were on the verge of forming a daily, intermediate, and yearly cycle low. EEM formed a daily swing low on Friday to signal the new daily cycle. Then EEM delivered bullish follow through on Monday.

EEM printed its lowest point on week 20, placing it in its timing band for an intermediate cycle low. EEM did form a marginal weekly swing low last week. However, this week EEM is delivering clear and convincing bullish follow through to signal that week 20 hosted the intermediate cycle low. A break of the declining trend line is needed to confirm the new intermediate cycle. And with EEM being in its timing band for a YCL, once the ICL is confirmed it will likely trigger a new yearly cycle as well.

The 7/06/18 Weekend Report Preview

The Dollar

The dollar peaked on day 11. It formed a swing high, negating the break out. It closed below the 10 day MA, turning it lower to signal the daily cycle decline. The dollar then closed below the daily cycle trend line to confirm the daily cycle decline.

Friday was day 16 for the dollar’s daily cycle. While the dollar managed to find support at the rising 50 day MA, it is a bit early to expect a DCL to form. And with the dollar in its timing band for an intermediate cycle decline it is more likely to see the dollar break below the 50 day MA to continue its daily cycle decline. The dollar is currently in a daily uptrend. It will remain in its uptrend unless it closes below the lower daily cycle band.

Stocks

Stocks closed convincingly above the declining daily cycle trend line on Friday to confirm the new daily cycle.

Stocks also closed above the upper daily cycle band. This ends the daily downtrend and begins a daily uptrend. With this being week 21 for the intermediate cycle we need to watch for a left translated daily cycle formation.

The decline into the DCL caused stocks to close below the 10 week MA. But the rally into the new daily cycle allowed stocks to regain the 10 week MA. At 21 weeks, stocks are in their timing band for a intermediate cycle decline. A weekly swing high and break below the weekly trend line is needed to confirm the intermediate cycle decline. Stocks are in a weekly uptrend. They will remain in their weekly uptrend unless they close below the lower weekly 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

Another Bearish Signal for Stocks

Stocks printed their lowest point on day 39, following the day 28 peak. That placed stocks in their timing band for a DCL. Stocks formed a swing low. Then on Thursday they closed above both the 10 day MA and the declining trend line to confirm the new daily cycle.

However, stocks delivered another bearish signal on Thursday.

Stocks printed another Selling on Strength day on Thursday. So far the 3 bullish days were also SOS days.

It is unusual to see these SOS days as stocks begin to rally out of a DCL. Taking a look at the rally out of the previous DCL we can see that stocks did not print a Selling on Strength day until day 14.

Currently, stocks are in their timing band for an intermediate cycle decline, which is something that I will discuss in the Weekend Report.I believe that the clustering of these SOS days is a warning signal for the pending intermediate cycle decline.

Bearish Signal for Stocks

Stocks delivered another bearish signal on Monday.

Stocks printed their lowest point on Thursday, following the day 28 peak. Thursday was day 39, placing stocks in their timing band for a DCL. While stocks have formed a swing low, we are still waiting on a break of the declining trend line to confirm that day 39 hosted the DCL.

But regardless if day 39 was the DCL, stocks delivered a second bearish signal on Monday. The first was the 523 million selling on strength that printed on Thursday. That was followed up by 216 million selling on strength on Monday. Usually we see selling on strength numbers near cycle tops. It is very unusual to see a SOS number at or near the cycle bottom, unless there is a longer term concern. Which in this case is that stocks are in their timing band for an intermediate cycle decline. This was something that I covered in the past weekend’s Weekend Report.

Sizzling Summer Sale

The summer mark down for stocks have begun.

This is week 20 for the intermediate equity cycle. That places stocks in their timing band for an intermediate cycle low. Stocks formed a weekly swing high last week and are delivering bearish follow through this week. The best sale prices will coincide with the intermediate cycle low. Stocks should break below the weekly trend line and manage to turn the 10 week MA lower before it prints its intermediate cycle low.

Monday was day 36 for the daily equity cycle. So stocks are also in their timing band to print a daily cycle low. Stocks could print a DCL this week. If so then stocks will likely need one more daily cycle to break below the weekly trend line and to turn the 10 week MA lower to complete the intermediate cycle decline.

Buy Signal Negated

The cycle band buy signal was negated on Thursday.

On Wednesday stocks formed a swing low above the upper daily cycle band. This signaled that stocks remain in a daily uptrend and delivered a cycle band buy signal.

But that changed on Thursday.

Stocks formed a swing high on Thursday which negated the cycle band buy signal. It also signaled that stocks are still declining into their daily cycle low. The swing high also allows us to construct a declining trend line. So now a swing low accompanied by a break of the declining trend line will confirm the new daily cycle.

Daily Cycle Decline

On Tuesday, stocks confirmed their daily cycle decline.

Stocks closed below the 10 day MA and also broke below the daily cycle trend line to confirm that the daily cycle is in decline. The peak on day 28 assures us of a right translated daily cycle formation. With Tuesday being day 32, stocks are in their timing band to print a DCL. So once a swing low forms, it will have good odds of marking the daily cycle low.

Stocks have established a daily uptrend. If a swing low forms above the lower daily cycle band that would indicate that stocks remain in their daily uptrend and would be a signal to enter long positions.