A Miner Bullish Scenario

The Miners formed a swing low on Wednesday and delivered bullish follow through on Thursday.

While 19 days is a bit early to expect a DCL, the Miners did turn the 10 day MA lower as it declined into the day 19 low. And following a stretched 67 day DCL we could see a shortened cycle here, which will help to balance out the cycle counts.

There is a bullish zero line crossover on the True Strength Indicator, which often accompanies a DCL. And there is also a change in behavior on RSI 05. Prior to the day 67 DCL, RSI did not even get overbought before reversing and then embedded in oversold. That pattern is changing. The RSI became embedded in overbought during the peak of the pervious cycle. It reversed quickly once oversold and is now heading back up to overbought. If is embeds again in overbought that will be a good indication that the Miners are now in the advancing phase of a new intermediate cycle.

The Miners also managed to close above the 50 day MA on Wednesday. The 50 day MA has been a very difficult resistance for the Miners to overcome. But if the can deliver some bullish follow through here …

.. that would signal a major change in trend. Which will be a game changer

Miner Progress

When we last discussed the Miners we observed that Tuesday’s bullish reversal could potentially signal the daily cycle low. Tonight we will review their progress.

The Miners followed Tuesday’s bullish reversal by forming a daily swing low on Wednesday. Tuesday was day 20, placing the Miners in the early part of its timing band for a daily cycle low. Wednesday’s swing low signals a new daily cycle. On Thursday the Miners delivered bullish follow through by closing above the 10 day MA. The Miners also delivered a bullish crossover on the True Strength Indicator, which is another signal that Tuesday hosted the DCL. A close above the declining 50 day MA will have us label day 20 as the daily cycle low.

The 11/12/19 Morning Update

Monday was day 27 for the daily equity cycle, placing stocks 3 days shy of its timing band for a daily cycle low.

Stocks are beginning to show signs of a pending daily cycle decline. Stocks have formed a swing high and there is a bearish crossover on the True Strength Indicator. The 10 day MA is aligning with the daily cycle trend line, so a close below the 10 day MA will signal that the daily cycle decline has begun. The peak on day 25 assures us of a right translated daily cycle formation which aligns with stocks being in a daily uptrend. Stocks will continue in their daily uptrend unless they close below the lower daily cycle band.

Miner Failure

We observed here that when the Miners closed below the lower daily cycle band on September 9th that they were beginning their intermediate cycle decline. We also discussed here how a bearish RSI pattern was beginning to emerge, which was another signal of the pending intermediate cycle decline.

The Miners broke below the previous daily cycle low on Monday to form a failed daily cycle which confirms that intermediate cycle decline. Monday was only day 11 for the daily Miner cycle. Which means that the Miners should trend lower for another 2 to 4 weeks before printing its intermediate cycle low.

The only thing that is not in agreement is the bullish divergence that we see developing on the True Strength Indicator. Typically these bullish divergences signal that the cycle low is near. In the Mid-Week Update I plan to break down where the Miners are in their intermediate cycle and what this bullish divergence may be telling us.

Stocks Deliver Warning Signal

Stocks closed lower on Thursday, calling into question if day 32 was the daily cycle low.

Stocks printed their lowest point last Thursday, which was day 32, to place stocks in their timing band for a daily cycle low. Stocks went on to form a swing low and close above the 10 day MA to have us label day 32 as the daily cycle low. But then stocks closed lower on Thursday …

There are three things that make me wonder whether or not day 32 was the daily cycle low. The 1st concern is the 10 day MA did not turn decisively lower. Normally during a decline into a cycle low the 10 day MA breaks noticeably lower. The 2nd concern is the bearish divergence on the True Strength Indicator. And the 3rd concern is the RSI turning lower. During an advancing phase of the intermediate cycle RSI tends to stay overbought for extended periods of time. The RSI reversed this time without even being oversold. That change in behavior by itself is a warning signal. When combined with the other signals, it has me wondering if stocks are still declining into their daily cycle low.

Oil Testing Triple Resistance

After peaking on day 18, oil printed a huge bearish candle that closed below triple support of the 200 day MA, the 50 day MA and the 10 day MA to signal the daily cycle decline.

But then oil did not deliver any bearish follow through.

Oil printed its lowest point on day 20. A swing low has since formed which allows us to construct the daily cycle trend line. A break below the trend line will confirm the daily cycle decline. However it appears that oil is beginning to coil below the triple resistance area. RSI has turned higher and the True Strength Indicator is close to delivering a bullish crossover. We also need to keep in mind that oil has just begun a new daily uptrend and is still early (week 5) in its intermediate cycle. Therefore a close above the 200 day MA will continue the daily uptrend and should result in a trending move.

Miner Break Through

The Miners broke convincingly above the 200 MA on Tuesday.

Tuesday was day 23 for the daily Miner cycle. The new high on day 23 assures us of a right translated daily cycle formation. However, 23 days places the Miners in their timing band for a daily cycle decline. There is a bearish divergence that is developing on the True Strength Indicator that we normally see as a cycle nears its peak. The large 226 million Selling on Strength is another indicator that the daily cycle is near its peak. Therefore we are watching for a swing high accompanied by a break below the accelerated daily cycle trend line to signal the daily cycle decline.

The 11/23/18 Weekend Report Preview

The Dollar

The dollar formed a swing low on Friday and closed above the declining trend line to signal a new daily cycle.

The decline into the day 25 low did breach the daily cycle trend line. But it did not turn the 10 day MA lower. However the timing band and the TSI bullish zero line crossover indicate a new daily cycle. The dollar is in a daily uptrend. It will remain in its uptrend unless it closes below the lower daily cycle band.

Stocks

Stocks were in their timing band for an intermediate cycle low. The rally out of the day 52 low confirmed the new daily cycle. Closing above the 200 day MA looked promising that it also marked the ICL. Then stocks broke lower.

The peak on day 7 indicates a left translated daily cycle formation. Losing both the 200 DMA & the 10 DMA, turning the 10 DMA lower, and closing below the lower daily cycle band all indicate that stocks are in a daily cycle decline. A break below the previous DCL of 2603.54 forms a failed daily cycle and confirms the extension of the intermediate cycle decline. Stocks are in a daily downtrend. They will remain in its downtrend unless they close above the upper 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.
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Natural Gas High

Natgas almost doubled this year, rallying over 94% off its yearly cycle low. However it appears that the yearly cycle has peaked

Here is a long term view of Natgas. You will notice that in previous years when the yearly cycle peak aligned with this level on the True Strength Indicator that precipitated a rather nasty yearly cycle decline.

In my special Report, Natgas – The Yearly Cycle Peak we will take a look at all of the cycles for Natgas. We will see how the daily and weekly cycles aligning for a yearly cycle decline.

I am offering my special report on Natgas – The Yearly Cycle Peak as part of the Likesmoney Black Friday deal.

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1) The Weekend Report, which is posted usually Saturday mornings. It discusses Dollar, Stocks, Gold, Miners, Oil, & Bonds in terms of daily, weekly and yearly cycles – and it includes the Likesmoney Combination Cycle Tracker & the Likesmoney Trend Tracker.

2) The Mid-Week Update. Posted on Wednesdays is a review of the daily and weekly charts for the above mentioned asset classes.

3) The Weekend Updates, posted on Sundays, take a look of the daily & weekly charts of the Dax, GYX, NATGAS & XLE.

4) Weekly Update of the Bullish Percentile Bingo

5) Frequent updates of my proprietary FAS Buy/Sell Indicator

The goal of the Weekend Report is to develop an on-going framework of expectations using cycle analysis.

Status of the Daily Equity Cycle

Stocks remain volatile. There are reasons to be bullish and reasons to be bearish.

Reasons to be bullish:
* The 10/29 cycle low placed stocks very deep in the timing band for an intermediate cycle low. Stocks are due for a multi-week rally.
* The initial thrust out of that low was the most powerful thrust out of a cycle low since the 2016 multi cycle low, which we discussed here.
* There is a bullish RSI pattern that is developing.
* The True Strength Indicator is trending higher.

Bearish concerns:
* Stocks are in a daily downtrend.
* Stocks have closed below both the 200 day MA and the 10 day MA.
* By closing lower on Monday, stocks have caused the 10 day MA to begin to turn lower.

One more reason to be bullish
* Stocks remain above the daily cycle trend line.
After peaking on day 7 stocks broke lower forming a pivot on day 13. The swing low that formed off the day 13 candle allowed us to construct the daily cycle trend line. While stocks did close lower on Monday, they remained above the newly constructed trend line. If stocks can form another swing here, that would give stocks the chance to regain the 10 DMA and the 200 DMA. However, if stocks break lower here and close below the daily cycle trend line, then that would signal a left translated daily cycle formation and a continuation of the intermediate cycle decline.

Look for the Likesmoney Black Friday Sale for New Subscribers

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This special Black Friday Sale will be available on Friday, 11/23/18 only.