Cycle Turn Indicator Direction and Swing Summary. of Select Markets as of the close on. January 30, 2018

Transcription

1 Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on January 30, 2018 Market Daily CTI Daily Swing Weekly CTI Weekly Swing Industrial Negative High Negative 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 Negative High Positive Low XAU Negative High Positive High Dollar Positive Low Negative High Bonds Negative High Negative High Crude Oil Negative High Negative Low Unleaded Negative 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

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.

3 January 30, 2018 Stocks End of Week Weekly Indicator Summary Intermediate-Term Buy 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. 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 I have explained in recent updates that the markets had moved into another important turn point. This turn point was by and large centered around the intermediate-term cycle low in the Dollar, which we knew was due with either the last trading cycle low or the current trading cycle low. When the last trading cycle low in the Dollar began to fail we knew that another trading cycle down into the latter portion of the timing band for the intermediate-term cycle low was at play and as we have moved into the timing band for this trading cycle low I have explained that this put us once again at a similar turn point which we sat in early January. I have also said that the key to this cyclical juncture taking hold would come with the triggering of the corresponding short-term buy and sell signals that are then followed by the completion of the appropriately corresponding weekly swing highs and lows. This is now occurring, so this time the turn point appears to be taking hold. The trading cycle low in the Dollar is not yet confirmed, but if it s not in place, it is very close at hand and it should also mark the intermediate-term cycle low. We are now simultaneously seeing the trading and what should prove to also finally be the

4 intermediate-term cycle tops in Gold, Crude Oil, the overall Commodity Complex and even Equities. We now have short-term sell signals on most major Equity averages, including the Industrials, the Transports and the S&P. We also have sell signals on Gold, Crude Oil, the XAU and the CRB Index. On the OSX we have both short and intermediate-term sell signals in the making as well as on the XAL, the AMEX, the NYSE Composite, the Transports as well as the FTSE. Therefore, at this time every indication is that this should now mark the long past due intermediate-term cycle top in stocks and commodities as well as the higher degree seasonal cycle tops, but we must now see intermediate-term sell signals on a weekly closing basis as evidence of the suspected intermediate-term cycle tops. The first chart below shows our distribution indicator. The red intermediate-term Advancing issues line is tied to the intermediate-term cycle, which has formed a divergence with its last peak and is now turning down hard. The green line remains above the black line, however, it is now beginning to roll back over. A cross below the black line in conjunction with the ongoing divergence should serve as additional confirmation of the anticipated intermediate-term cycle top.

5 The Trading Cycle Oscillator in the upper window has crossed nicely below its trigger line. The Momentum indicator in the upper window has turned down hard as well and is now sitting marginally above its zero line. A cross below the zero line should serve as additional confirmation of the trading cycle top. The stochastic in the middle window has turned down from overbought levels and in doing so is 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. The Trend Indicator remains above its trigger line, but is now also trying to turn down.

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. Conditions have been extremely ripe for the trading cycle top and what should also prove to be the higher degree intermediate-term cycle tops. As discussed last week, we had moved back into another technical juncture in which conditions were also very favorable for a turn. Monday was an inside day, so there were no changes there, but on Tuesday price completed the formation of a daily swing high that was confirmed by a downturn of ALL Three of the Primary Short- Term Indicators. In doing so a short-term sell signal was triggered and the expectation is that this marked the trading and intermediate-term cycle top. Ideally, it should also prove to mark the seasonal cycle top as well, but as stretched as this advance has become, there are now some timing issues with these higher degree cycle lows occurring in conjunction with this next trading cycle low. More on that as this develops. The next step with regard to the intermediate-term cycle top will be the completion of a weekly swing high.

7 Both the Intermediate Term Breadth Momentum Oscillator and the Intermediate Term Volume Momentum Oscillator are now clearly in sync below their trigger lines.

8 The McClellan Oscillator and Summation Indexes are also used to measure the intermediateterm 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 Volume Summation Index and the McClellan Summation Index are also clearly in sync to the downside, which is also suggestive of this overdue top. The Ratio Adjusted McClellan Oscillator remains below the trigger line I ve added and is already approaching oversold levels. That said, there are typically divergences at trading and intermediate-term cycle lows, so this decline should have further yet to go.

9 Next is the Smoothed McClellan Oscillator which has telegraphed this top nicely and is now well below its trigger line.

10 The short-term Accumulation/Distribution Index has turned back down. In Summary: I said in the weekend update that I thought the turn point in association with the pending trading and what should be the intermediate-term cycle low in the Dollar was key and that it should coincide with a turn in not only Equities, but also in the overall Commodity complex. We obviously did not know if this turn point was going to take hold, but I also said that it appeared to have a higher probability at this juncture than the last opportunity a few weeks back. Based on the price action this week, we can only assume that this turn point is taking hold. More on this as it develops.

11 Gold End of Week Weekly Indicator Summary Intermediate-Term Buy 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 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 last trading cycle low was seen on January 10th and we have known that Gold was moving into what should be the trading and higher degree intermediate-term cycle top. The price action on Monday completed the formation of a daily swing high, per the parameters given here in the weekend update. In doing so, the daily CTI, plotted with price, also turned down, which triggered another short-term sell signal. This short-term sell signal now makes for an opportunity to also cap the anticipated intermediate-term cycle top. Once a weekly swing high is formed and confirmed by a downturn of the weekly CTI, that higher degree top should be in place. The timing band for the next trading cycle low runs between February 6th and February 20th. Therefore, based on this timing band and the overall oscillator picture, we should have further weakness into the trading cycle low to go and the expectation is that it will trigger an intermediate-term sell signal.

12 Next is our daily chart of the XAU. Last Thursday a short-term sell signal was triggered and as I said at the time, that sell signal appeared to once again be leading Gold. Given the weakness seen thus far this week, this certainly appears to be the case. We now have a weekly swing high in the making on the XAU, but with the weekly CTI still positive, we do not yet have an intermedate-term sell signal in the making. However, the expectation is that it is coming.

13 Dollar End of Week Weekly 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 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 last trading cycle low occurred on January 2nd, which failed to hold with respect to the intermediate-term cycle low, which has lead to another trading cycle down into the intermediateterm cycle low, which is due in conjunction with the now due trading cycle low, which is due between January 26th and February 9th. Given the reversal off of the low on January 25th, along with the accompanying divergent oscillator picture and now the short-term buy signal that was triggered on Monday, there is a very good chance that the trading cycle low was seen a day on the early side of the timing band for this low. That said, this short-term buy signal is marginal and we need to see a decisive move above Monday s high in order to further confirm this buy signal. To the contrary, any further weakness from here should be either a retest of the January 25th daily swing low or a final push into the trading cycle low, which ever the case should prove to be. Point being, in the event we haven t seen the trading cycle low, it should be close at hand with another push down or possible retest of the January 25th daily swing low AND, this trading cycle low should prove to mark the intermediate-term cycle low as well.

14 Bonds End of Week Weekly 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 Neutral/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 current trading cycle low runs between January 12th and February 5th. With price having moved into the timing band for the trading cycle low and in light of the divergent oscillator picture, the price/oscillator picture continues to be ripe for the now due trading cycle low. Once a daily swing low is formed and confirmed by an upturn of the daily CTI, plotted with price, a short-term buy signal will be triggered and the trading cycle low should be in place. Longer-term, the March seasonal cycle low was violated, which now puts a left-translated seasonal cycle low at play in bonds. This also now points toward the October 27th low as having marked the last intermediate-term cycle low and that we also have a failed and left-translated intermediate-term cycle low at play. More on this in the February letter. Shortterm, Bonds should be nearing the trading cycle low.

15 Crude Oil Per the parameters given here in the Thursday night update, Crude Oil completed the formation of a daily swing high on Friday that was confirmed by a downturn of the daily CTI, which triggered a short-term sell signal. As explained in the weekend update, that sell signal was marginal and I said that we needed to see a decline below Friday s low in order to further confirm this sell signal. On Monday Crude Oil marginally completed the formation of a daily swing high, but with the daily CTI still negative, Friday s short-term sell signal remained intact and on Tuesday we saw the additional weakness needed to further confirm the sell signal. The expectation has been and continues to be that crude oil has been pushing into an intermediateterm and ideally a seasonal cycle top as should be the case with Equities and commodities in general. Any further weakness that completes the formation of a weekly swing high and downturn of the weekly CTI will trigger an intermediate-term sell signal, which should prove to mark the intermediate-term cycle top. A daily swing low will be completed on Wednesday if holds and if is bettered.

16 Natural Gas I have also included a chart of Natural Gas. As with Crude Oil and the overall Commodity Complex, the expectation has been that it too, was pushing into the higher degree intermediateterm and what should prove to also be the seasonal cycle top. But, as with everything else, we needed to first see the triggering of a short-term sell signal, which finally occurred on Tuesday. The next step here with regard to the higher degree cycle tops will be the completion of a weekly swing high and down turn of the weekly CTI.

17 Oil Service Index In addition, I have also included a chart of the OSX, which triggered a short-term sell signal in conjunction with the completion of the daily swing high on January 24th. This week the weakness has continued and we now have a weekly swing high in the making that is thus far being confirmed by a downturn of the weekly CTI, which is further suggestive of the anticipated higher degree cycle top. The downturn of the Trend Indicator at this level is also suggestive of the higher degree intermediate-term cycle top. Every indication is that the past due and consequently long anticipated intermediate-term cycle tops are one by one taking hold Cycles News & Views; All Rights Reserved Click Below To Contact the Web Master tim@cyclesman.com