Cycle Turn Indicator Direction and Swing Summary. of Select Markets as of the close on. October 4, Daily CTI. Swing

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1 Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on October 4, 2018 Market Daily CTI Daily Swing Weekly CTI Weekly Swing Industrial Negative High Positive Low Transports Negative High Negative High NDX Negative High Positive Low S&P Inverse Fund Positive N/A * Negative High CRB Index Negative High Positive Low Gold Positive Low Positive High XAU Negative High Positive Low Dollar Positive Low Positive Low Bonds Negative High Negative High Crude Oil Negative High Positive Low Unleaded Negative High Positive Low Natural Gas Negative High Positive Low *Since this fund is quoted at the end of the day it is impossible for the concept of swing highs and lows to apply on a daily level. The primary interests here are the weekly developments. The daily is representative of the short-term and the weekly is representative of the intermediate-term Copyright 2018 by Tim Wood 3

2 Short-term Updates Note on the Cycle Turn Indicator The most important indicator we have is the Cycle Turn Indicator and the most important timeframe, at least in my mind, is the intermediate-term. This indicator has proven itself time and time again. In reality, this is all we really need to know. Everything else is secondary. That being said, please be sure to monitor the "Cycle Turn Indicator Direction and Swing Summary" above. Red indicates that a swing high and down turn of the Cycle Turn Indicator has occurred and lower prices should follow. The only exception here is that on the daily stock market signals we also want to see both the slow cycle Turn Indicator and the New High/New Low Differential in agreement with the original Cycle Turn Indicator, which is what is covered in this summary above. Yellow, is cautionary meaning that the Cycle Turn Indicator and the swing are not in agreement, which is typically indicative of a trend change. Green, means that a swing low has occurred and that the Cycle Turn Indicator is positive, which should be followed by higher prices. Again, the only exception here is the daily stock market signals in that we want to see both the slow Cycle Turn Indicator and the New High/New Low Differential in agreement with the original Cycle Turn Indicator, which is what is covered in this summary above. For everything else, all that matters is the formation of a swing and the direction of the Cycle Turn Indicator. All subscribers who do not understand cyclical translation should click here "Notes for New Subscribers." It is important that you read and understand the content found in both of the PDF files that you will find at this link. Copyright 2018 by Tim Wood 4

3 Stocks End of Week Intermediate-Term Indicator Summary Intermediate-Term Neutral Primary Indicators Formation of a Weekly Swing Low Cycle Turn Indicator (CTI) CTI on Rydex Tempest Fund * Confirming Indicators Trend Indicator (TI) Advance/Decline Issues Diff New High New Low Diff Secondary Indicators Stochastic Cycle Momentum Indicator *When this indictor is it is negative for the market and visa versa. October 4, 2018 Daily Indicator Summary Short-Term Sell Primary Indicators Formation of a Daily Swing High Cycle Turn Indicator (CTI) Slow Cycle Turn Indicator (CTI) New High/New Low Differential Confirming Indicators Trend Indicator (TI) McClellan Intermediate Term Breadth Momentum Oscillator (ITBM) McClellan Intermediate Term Volume Momentum Oscillator (ITVM) McClellan Summation Index McClellan Volume Summation Index Secondary Short Term Indicators Stochastic Cycle Momentum Indicator Trading Cycle Oscillator Momentum Indicator Ratio Adjusted McClellan Oscillator Crossover Accumulation/Distribution Index Tuesday s short-term buy signal on Gold remains intact. On Thursday a short-term sell signal was triggered on the XAU. Gold should ideally follow and any further weakness that completes the formation of weekly swing high on Gold and the XAU should prove to cap the intermediate-term/counter-trend advance. Crude Oil re-triggered another short-term sell signal on Thursday and in doing so this is another opportunity to cap the intermediate-term advance. But, we have to see an intermediate-term sell signal to do so. The CRB Index also re-triggered another short-term sell signal on Thursday, which should ideally also cap the counter-trend advance there, but, here too, we must next see the completion of a weekly swing high as evidence that this advance has run its course. Once a weekly swing high and intermediate-term sell signal is re-triggered in Gold, the XAU, and Crude Oil, the counter-trend/intermediate-term advance in commodities should have run its course. The short-term buy signal in the Dollar remains intact and we now have an intermediate-term buy signal in the making. We must next see a right-translated trading cycle advance as evidence that the higher degree advance has resumed. Bonds remain in the window for the trading cycle low Copyright 2018 by Tim Wood 5

4 and it originally looked as if this low was seen on September 25th. With that low now having failed, we either have a failed and left-translated trading cycle low at play, or we have seen an additional push down into the trading cycle low. We will assume the former until Bonds can prove the latter. If we see another daily swing low in the next few days, then it probably will prove to be the latter. We should know more on this soon. Longer-term, the structure of Bonds is broken. The timing band for the low on the Industrials runs between September 26th and October 15th. As a result of the September 21st daily swing high, the decline into the September 26th low and the advance that followed, every indication is that the trading cycle low was seen on September 26th and that we have had a weak advance out of the trading cycle low. Now, in light of the weakness seen on Thursday, one of two things is occurring. Either we have seen a left-translated trading cycle advance that is now turning down out of its trading cycle top, or the September 26th low did not mark the trading cycle low and we are just now seeing the decline into that low. When looking at the Industrials, the evidence tends to point toward the trading cycle low having been seen on September 26th. When looking at other indexes and averages, there is not enough evidence to say. Therefore, the best assumption to make here is that we have a left-translated trading cycle and if that is not the case, as we move through the remainder of this timing band the market should prove otherwise. Either way, because of the weak New High/New Low data, a short-term buy signal was never triggered, so the ongoing short-term sell signal stands. This phasing should clarify itself next week. The first chart below shows our distribution indicator, which continues to weaken. The red intermediateterm Advancing issues line is tied to the intermediate-term cycle, which remains very weak. The green line continues to weaken below the black, which continues rolling back over. Again, a top with this oscillator in this position can be a rather negative setup. The oscillator behavior here continues to be reflective of the underlying poor internals. Copyright 2018 by Tim Wood 6

5 The Trading Cycle Oscillator in the upper window remains above its trigger line, which is suggestive of the trading cycle low having been seen on September 26th. The Momentum indicator, which is also plotted in the upper window, remains above its zero line, which is also reflective of the trading cycle low. The upturn of the stochastic in the middle window is also suggestive of the trading cycle low and the down turn is now suggestive of the trading cycle top. The first of our Primary Short-Term Indicators is the New High/ New Low Differential, plotted with price, which remains negative. It has been because of the poor High/Low data that a short-term buy signal was not triggered in association with the September 26th daily swing low, which I tend to suspect was the trading cycle low. The Trend Indicator is sitting just above its trigger line. Copyright 2018 by Tim Wood 7

6 The Three Primary Short-Term Indicators are the Original and the Slow Cycle Turn Indicators, both plotted below, and the NYSE New High/New Low Differential, plotted with price above. Bottom line, another short-term sell signal was re-triggered on Thursday and at this time, the weight of the evidence suggests that the trading cycle low was seen on September 26th. If so, the market is now at risk of a left-translated trading cycle top. We will assume this to be the case until proven otherwise and if the market is going to prove otherwise it should do so within the next week. Copyright 2018 by Tim Wood 8

7 Both the Intermediate Term Breadth Momentum Oscillator and the Intermediate Term Volume Momentum Oscillator remain below their trigger lines, which continues to be reflective of the poor internals. Copyright 2018 by Tim Wood 9

8 The McClellan Oscillator and Summation Indexes are also used to measure the intermediate- term internals. The Ratio Adjusted McClellan Oscillator in the upper window is shorter-term in nature and is therefore used to help identify the shorter-term tops and bottoms, but it is also useful in identifying intermediate-term cycle tops and bottoms. Both the McClellan Summation Index and the McClellan Volume Summation Index remain in gear to the downside. The Ratio Adjusted McClellan Oscillator remains negative. The behavior of these indicators also continues to be suggestive of the weak internals. Copyright 2018 by Tim Wood 10

9 Next is the Smoothed McClellan Oscillator, which remains below its trigger line. Copyright 2018 by Tim Wood 11

10 The Accumulation/Distribution Index is trying to roll back over, but remains slightly above its trigger line, which is suggestive of the trading cycle low. Copyright 2018 by Tim Wood 12

11 Gold End of Week Intermediate-Term Indicator Summary Intermediate-Term Sell Daily Indicator Summary Short-Term Buy Primary Indicators Formation of a Weekly Swing High Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Indicators Stochastic Primary Indicators Formation of a Daily Swing Low Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Short Term Indicators Stochastic The price action on both Wednesday and Thursday were inside days with respect to Tuesday s price bar. For this reason, there have been no changes. The timing band for the trading cycle low ran between September 11th and September 25th. Every indication is that this low was seen on September 11th and that the violation of the September 11th low on September 27th and into the low on the 28th was a result of a failed and left-translated trading cycle. If so, any further strength in association with the buy signal that was triggered on Tuesday will not better the September 13th high and so far, that has not occurred. However, if the September 13th high is bettered, it will mean that the trading cycle ran a couple of days on the long side of the timing band and that the low was seen on September 28th. In the event this proves to be the case, it should still be counter-trend in association with the advance out of the August intermediate-term cycle low. More on this once we see whether the September 13th high holds. Another daily swing high will be completed on Friday if 1, is not bettered and if 1, is violated. Copyright 2018 by Tim Wood 13

12 XAU On Tuesday, the XAU completed the formation of another daily swing low that was confirmed by an upturn of the daily CTI, which triggered another short-term buy signal. I said here in the Tuesday night update that this should be associated with the counter-trend advance, but that until another daily swing high was formed and reconfirmed by another downturn of the daily CTI, higher prices would remain possible. On Wednesday the XAU moved higher and then reversed off of its highs and closed on the lows. On Thursday a daily swing high was completed and confirmed by a downturn of the daily CTI, which triggered a short-term sell signal. As a result of this short-term sell signal the opportunity to cap the counter-trend advance is now at hand. Any further weakness that completes the formation of a weekly swing high should serve as confirmation to that effect. Another daily swing low will be completed on Friday if holds and if is bettered. Copyright 2018 by Tim Wood 14

13 Dollar End of Week Intermediate-Term Indicator Summary Intermediate-Term Sell Primary Indicators Formation of a Weekly Swing Low Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Indicators Stochastic Daily Indicator Summary Short-Term Buy Primary Indicators Formation of a Daily Swing Low Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Indicators Stochastic The timing band for the trading cycle low runs between September 21st and October 5th and every indication continues to be that this low was seen on September 21st. The advance out of this low completed the formation of a weekly swing low last week and we are now seeing the weekly CTI turning up. If nothing changes on Friday, we will also have an intermediate-term buy signal in place as well. As further evidence of the intermediate-term cycle low we will need to see this trading cycle advance unfold with a right-translated structure. We have known that it was this trading cycle low in which the Dollar was going to have the opportunity to correct the potentially left-translated intermediate-term cyclical structure. So far so good, but this test is still at hand. In the meantime, this short-term buy signal will remain intact until another daily swing high and downturn of the daily CTI is seen. A daily swing high will be completed on Friday if is not bettered and if is violated. Copyright 2018 by Tim Wood 15

14 Bonds End of Week Intermediate-Term Indicator Summary Intermediate-Term Sell Primary Indicators Formation of a Weekly Swing High Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Indicators Stochastic Daily Indicator Summary Short-Term Sell Primary Indicators Formation of a Daily Swing High Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Short Term Indicators Stochastic The timing band for the trading cycle runs between September 20th and October 11th. As a result of the short-term buy signal on September 26th, every indication was that the trading cycle low was seen on September 25th. We are still operating within the timing band for this low, so it is possible that we are simply seeing an additional push down into the trading cycle low. If we see the completion of a daily swing low in the next few days, as we move toward the outer boundary of this timing band, then that is probably the case. But, until that happens, we have to assume that we now have a failed and left-translated trading cycle at play. If this should prove to be the trading cycle low here, then I suspect it may also prove to be the intermediate-term cycle low as well, but we will have to see the completion of a weekly swing low. Longerterm, the cyclical structure of bonds is broken and any advance, regardless of its degree, should be countertrend. Copyright 2018 by Tim Wood 16

15 Crude Oil The price action on Thursday completed the formation of a daily swing high that was confirmed by a downturn of the daily CTI. In doing so, another short-term sell signal was triggered. I knew that the intermediate-term advance out of the August low was a retest of the July high, but I expected it to be a counter-trend advance in that it would not better the July high. Since the advance out of the August low began I have also known that in addition to a short-term sell signal, we needed to see an intermediate-term sell signal in order to cap this advance. As a result of this short-term sell signal, the opportunity for this to happen is once again at hand. If we see the completion of a weekly swing high next week that is accompanied by a downturn of the weekly CTI, then the intermediate-term cycle top should finally be in place. More on that if it develops. For now, this short-term sell signal will stand until another daily swing low is formed and confirmed by an upturn of the daily CTI. Another daily swing low will be completed on Friday if holds and if is bettered Cycles News & Views; All Rights Reserved timwood1@cyclesman.com Copyright 2018 by Tim Wood 17

16 Copyright 2018 by Tim Wood 18