Cycle Turn Indicator Direction and Swing Summary. of Select Markets as of the close on. March 21, Daily CTI. Swing

Transcription

1 Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on March 21, 2019 Market Daily CTI Daily Swing Weekly CTI Weekly Swing Industrial Positive Low Positive Low Transports Negative Low Negative High NDX Positive Low Positive Low S&P Inverse Fund Negative N/A * Negative High CRB Index Positive Low Positive Low Gold Positive Low Negative Low XAU Negative Low Negative High Dollar Negative Low Negative High Bonds Positive Low Negative Low Crude Oil Positive Low Positive Low Unleaded Positive Low 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 2019 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 2019 by Tim Wood 4

3 Stocks End of Week Intermediate-Term Indicator Summary Intermediate-Term Sell Formation of a Weekly Swing High CTI on Rydex Tempest Fund * 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. March 21, 2019 Daily Indicator Summary Short-Term Neutral Formation of a Daily Swing Low Slow New High/New Low Differential 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 The price action on Wednesday completed the formation of a daily swing high, but it was not accompanied by a downturn of ALL Three of the Primary Short-Term Indicators and for that reason, the advance out of the March 11th half-trading cycle low in Equities remains intact. Price initially moved lower on Thursday, but the reversal higher created an outside up day. However, we still have a daily swing high in place and the overall price/oscillator picture continues to be indicative of the trading cycle top. Bottom line, while conditions and the timing are ripe for the trading cycle top, we have to see the completion of a daily swing high and the triggering of a short-term sell signal as evidence that this top has been seen and until such time, the short-term buy signal will stand and higher prices will remain possible. The short-term buy signal in Gold remains intact. At the same time, the price reversal seen on Thursday and the accompanying oscillator picture make conditions ripe for a top and once a daily swing high and downturn of the daily CTI are seen, the trading cycle top should be in place. The XAU completed the Copyright 2019 by Tim Wood 5

4 formation of a daily swing low on Thursday, but in this case a short-term buy signal has still not been triggered. The short-term buy signal in Crude Oil remains intact and this continues to be a technical opportunity for a top in Crude Oil in conjunction with Equities. The short-term buy signal on the CRB Index remains intact, but it too, should also be counter-trend. The Dollar completed the formation of a daily swing low on Thursday and we may well have an early trading cycle low in place. Any further advance that turns the daily CTI up will trigger a short-term buy signal, which will serve as evidence to that effect. Even so, this remains an important juncture for the Dollar and we must see the pending trading cycle advance unfold with a right-translated structure. Otherwise, it will leave the Dollar positioned for further weakness into the seasonal cycle low. The short-term buy signal on the 30-year Bond remains intact and we have known that the higher degree intermediate-term cycle low should be in place. But, Bonds have also been at risk of a left-translated trading cycle top. I have explained that in order to eliminate this risk, the March 12th daily swing high must be bettered, which we saw on Thursday, which serves as further evidence of the intermediate-term cycle low. Below is our distribution indicator. The red intermediate-term Advancing issues line is tied to the intermediate-term cycle, which continues to weaken. The green MA line also continues to weaken, which is another indication of the intermediate-term cycle top. Copyright 2019 by Tim Wood 6

5 The Trading Cycle Oscillator in the upper window has turned below its trigger line. The Momentum indicator in the upper window remains above its zero line, but also continues to weaken. The upturn of the stochastic in the middle window continues turning down from overbought levels, which makes conditions ripe for a top. The first of our Primary Short-Term Indicators is the New High/New Low Differential, plotted with price, which ticked back up on Thursday. The Trend Indicator remains below its trigger line. Copyright 2019 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. The price action on Wednesday completed the formation of a daily swing high, but a short-term sell signal was not triggered because it did not turn the Slow Cycle Turn Indicator down in sync with the other two Primary Short-Term Indicators. On Thursday the Industrials initially moved lower, but then reversed higher which resulted in an outside up day. The overall oscillator behavior and cyclical phasing of the trading cycle suggests that the trading cycle top should be at hand. But, until a daily swing high and downturn of ALL Three of the Primary Short-Term Indicators is seen, we cannot say that this top has been seen. This trading cycle top, once in place, will be an opportunity to cap the intermediate-term cycle and the price behavior in association with this half-trading cycle top remains structurally key. Copyright 2019 by Tim Wood 8

7 Both the Intermediate Term Breadth Momentum Oscillator and the Intermediate Term Volume Momentum Oscillator are again sitting marginally below their trigger lines and the overall oscillator behavior continues to be reflective of the trading and what should also ideally prove to be the intermediate-term cycle top as well. Copyright 2019 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 have basically flattened. The Ratio Adjusted McClellan Oscillator has turned back up and is now sitting right on its zero line and with this indicator above its trigger line, it remains positive as we use it. A crossing below the trigger line in association with the re-triggering of a short-term sell signal should serve to confirm that the trading and intermediate-term cycle top has been seen. Copyright 2019 by Tim Wood 10

9 Next is the Smoothed McClellan Oscillator, which continues to sit right on its trigger line. Copyright 2019 by Tim Wood 11

10 The Accumulation/Distribution Index remains below its trigger line, which continues to be reflective of the trading cycle top in the making. Any weakness in association with the completion of a daily swing high and the triggering of a short-term sell signal will be suggestive of the half-trading cycle advance out of the March 11th low having run its course. In Summary, the March 11th low marked the half-trading cycle low and on March 15th a short-term buy signal was re-triggered on the Industrials. This trading cycle top continues to be an opportunity to cap the intermediate-term advance and the advance out of the half-trading cycle low continues to be a retest with regard to that top. Ideally, the intermediate-term cycle top should be in place and any additional weakness from here that completes the formation of another daily swing high will be suggestive of this half-trading cycle advance having run its course, which should in turn serve to confirm the higher degree intermediateterm cycle top. Copyright 2019 by Tim Wood 12

11 Gold End of Week Intermediate-Term Indicator Summary Intermediate-Term Sell Daily Indicator Summary Short-Term Neutral Formation of a Weekly Swing High Cycle Momentum Indicator Secondary Indicators Stochastic Formation of a Daily Swing Low Cycle Momentum Indicator Secondary Short Term Indicators Stochastic The timing band for the trading cycle low ran between February 18th and March 5th. This low was seen on March 7th and the most recent short-term buy signal in association with the advance out of that low remains intact. However, in light of the higher degree intermediate-term sell signal and what should be the intermediate-term cycle top, the expectation continues to be for the advance out of the March 7th trading cycle low to be counter-trend. Thursday s price reversal and the accompanying oscillator picture leaves Gold positioned for the trading cycle top and lower prices. Gold still remains at risk of a left-translated trading cycle top and any further decline on Friday that triggers a short-term sell signal should serve to confirm that the trading cycle top has been seen. At a higher level, more confirmation of the seasonal cycle top is needed, but until Gold can prove otherwise, the assumption will continue to be that the higher degree seasonal cycle advance out of the August low has run its course. A daily swing high will be completed on Friday if 1, is not bettered and if 1, is violated. Copyright 2019 by Tim Wood 13

12 Next is the XAU. The price action on Thursday completed the formation of a daily swing low, but with the daily CTI still negative, a short-term buy signal has not yet been triggered. As with Gold, the advance out of the March 7th trading cycle low should prove to be counter-trend and if so, this advance should peak with a left-translated structure, which so far, it continues to be at risk of doing. We now need to see the completion of another daily swing high and the re-triggering of another short-term sell signal in order to cap this short-term advance. A daily swing low will be completed on Friday if is not bettered and if is violated. Copyright 2019 by Tim Wood 14

13 Dollar End of Week Intermediate-Term Indicator Summary Intermediate-Term Buy Formation of a Weekly Swing Low Cycle Momentum Indicator Secondary Indicators Stochastic Daily Indicator Summary Short-Term Neutral Formation of a Daily Swing Low Cycle Momentum Indicator Secondary Indicators Stochastic The trading cycle low was last seen on February 28th and the timing band for the next trading cycle low runs between March 26th and April 9th. The March 13th short-term sell signal remains intact and with the violation of the February 28th trading cycle low, the concerns with regard to the risk of a left-translated trading cycle top were seen. While we are a bit early for the trading cycle low, we have seen a couple of early trading cycle lows recently and in light of the completion of a daily swing low and upturn of the Cycle Momentum Index and the stochastic from oversold levels, there is a very good chance that we have just seen another early trading cycle low. Any further advance that turns the daily CTI up will trigger a shortterm buy signal and upon such occurrence we will have to assume that this was the case. Because of the higher degree cycle low, I still have to give the Dollar some benefit of the doubt here. But, once this trading cycle low is confirmed, it has to unfold with a right-translated structure. Otherwise, the Dollar s inability to do so will serve as further evidence of a left-translated intermediateterm cycle top. Therefore, this remains a critical spot for the Dollar. Copyright 2019 by Tim Wood 15

14 Bonds End of Week Intermediate-Term Indicator Summary Intermediate-Term Neutral Formation of a Weekly Swing Low Cycle Momentum Indicator Secondary Indicators Stochastic Daily Indicator Summary Short-Term Buy Formation of a Daily Swing Low Cycle Momentum Indicator Secondary Short Term Indicators Stochastic The trading cycle low was seen on March 1st and the timing band for the next trading cycle low runs between March 22nd and April 12th. We have known that the intermediate-term cycle low is due with either the recent trading cycle low or the next. The trading cycle advance out of the March 1st low had begun to weaken early, which left Bonds at risk of a left-translated trading cycle advance, which consequently would leave Bonds positioned for another trading cycle down into the intermediate-term cycle low. As I have stated in recent updates, we have needed to see an advance above the March 12th daily swing high before another short-term sell signal was triggered in order to correct the potential of a left-translated trading cycle top. With Bonds bettering not only the March 12th daily swing high on Thursday, but also the February trading cycle top, the structure now suggests that the intermediate-term cycle low was seen in conjunction with the March 1st trading cycle low. Thursday s re-triggering of a short-term buy signal now needs to be followed by a re-triggering of another intermediate-term buy signal. Copyright 2019 by Tim Wood 16

15 Crude Oil Still no change with Crude Oil. The March 11th short-term buy signal remains intact and the expectation continues to be that the advance out of the December low is an intermediate-term/counter-trend advance that will peak in close proximity with Equities. The stochastic continues to roll over from overbought levels, which makes the oscillator picture ripe for a top. However, as explained all along, until we see the triggering of a short-term sell signal that evolves into the completion of a weekly swing high and downturn of the weekly CTI, the turn in Crude oil is not yet. A daily swing high will be completed on Friday if is not bettered and if is violated Cycles News & Views; All Rights Reserved timwood1@cyclesman.com Copyright 2019 by Tim Wood 17