Cycle Turn Indicator Direction and Swing Summary. of Select Markets as of the close on. April 10, 2018

Transcription

1 Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on April 10, 2018 Market Daily CTI Daily Swing Weekly CTI Weekly Swing Industrial Positive Low Negative High Transports Negative High Negative High NDX Positive Low Negative Low S&P Inverse Fund Negative N/A * Positive Low CRB Index Positive Low Negative Low Gold Positive Low Positive High XAU Positive Low Positive Low Dollar Negative High Positive High Bonds Positive Low Positive Low Crude Oil Positive Low Negative Low Unleaded Positive Low Negative Low Natural Gas Negative Low Positive High *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 April 10, 2018 Stocks End of Week Weekly Indicator Summary Intermediate-Term Sell Primary Indicators Formation of a Weekly Swing High 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 Neutral Primary Indicators Formation of a Daily Swing Low 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 Gold and the XAU triggered short-term buy signals on Tuesday in association with what should be yet another counter-trend advance. The CRB Index triggered another short-term buy signal on Monday and on Tuesday Crude Oil followed. Here too, this should ideally be in conjunction with counter-trend bounces as the seasonal and 3-year cycle top in the overall commodity complex continues trying to form. The reversal seen in the Dollar on Friday put it at risk of a short-term top and on Monday a short-term sell signal was triggered. This decline has again carried the Dollar to modestly oversold levels, which makes conditions ripe for a low. Once in place, the advance out of that low must carry the Dollar above the March 1st high or else the Dollar will be setting up for another intermediate-term cycle down into the higher degree seasonal and 4-year cycle lows. Short-term, Bonds have a similar structure to the Dollar and they have begun to bounce out of what in their case appears to have been a counter-trend decline. While the performance of the Dollar continues to concern me, at this point, I have to continue to give it the benefit of of the doubt.

4 On March 23rd the Industrials closed below their February 8th closing low, but the Transports did not. On April 9th, the Transports closed marginally below their corresponding closing low. Therefore, we have now seen a close by both averages below their previous secondary low point. But, this is less than ideal and as I explained in the April Research Letter, in order for this to be clean, I want to see a JOINT close below those levels that also now takes the Industrials below their March 23rd closing low. It is common to see a bounce once a Dow Theory Primary Trend Change occurs because by nature price is moving into a low when it breaks a previous low. For this reason, I want to then also see the accompanying structural violation of the previous cyclical intraday lows. I think we are setting up for this to happen, but we need to see it. The current Dow Theory Chart that I included in the April Research Letter can be found below.

5 Also, cyclically, the short-term buy signal in association with the advance out of the April 2nd low remains intact and from this perspective I am actually glad that we have seen the Industrials holding here because it has served to confirm the cyclical phasing. There is no doubt that the overall cyclical structure here leaves the market in a risky position, but until another short-term sell signal is re-triggered, the advance out of the April 2nd trading cycle low will remain intact. Another daily swing high that is confirmed by a downturn of ALL Three of the Primary Short- Term Indicators will re-trigger another short-term sell signal and once that happens the risk here will be even greater as this will then put the market in a position to violate the April 2nd trading cycle low. The expectation is for this advance to peak with a left-translated top, but again, until a short-term sell signal is triggered, the advance out of this trading cycle low remains intact. When I talk about the market risk associated with this setup, let me show you what I mean. Below is a daily chart of the Russian Micex 10, which also made its trading cycle low on February 9th. In this case the trading cycle top occurred on March 12th so it was not lefttranslated. This in turn meant that the trading cycle low should hold above the February 9th trading cycle low, which it did and this low was seen on March 28th. I warned about the weak 4- year cycle advance here in the April Research Letter just this weekend and explained how the structure of the Micex 10, Tel Aviv 35, the FTSE and the AMEX had all begun to show structural signs of trouble. On Monday the Micex 10 was down some 8% and in doing so it is now challenging what I think was the previous 4-year cycle low. Granted, commodities, Gold and most Equity averages are continuing to hold, but make no mistake about it, the risk here is in fact high and most are completely unaware.

6 The first chart below shows our distribution indicator. The red intermediate-term Advancing issues line is tied to the intermediate-term cycle, which has again turned back up. Looking at the overall behavior here, it continues to be suggestive of the trading cycle low. The upturn of the green line above the black line is reflective of the intermediate-term cycle low. Everything here is confirming the cyclical picture.

7 The Trading Cycle Oscillator in the upper window has turned down below its trigger line. The Momentum indicator has also turned down and is now sitting just above its zero line. The stochastic in the middle window remains negative. The first of our Primary Short-Term Indicators is the New High New Low Differential, plotted with price, which turned ever so slightly negative on Tuesday. The Trend Indicator is sitting just above its trigger line, which serves to also confirm the April 2nd low as the trading cycle low.

8 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, every indication is that the trading cycle low was seen on April 2nd and the shortterm buy signal associated with that low remains intact. Because of the left-translated intermediate-term cycle on the Industrials, the expectation is that this should prove to be a counter trend advance. In the meantime, until a daily swing high is formed and confirmed by a downturn of ALL Three of the Primary Short-Term Indicators, this buy signal will stand. A daily swing high will be completed on Wednesday if 24, is not bettered and if 24, is violated.

9 Both the Intermediate Term Breadth Momentum Oscillator and the Intermediate Term Volume Momentum Oscillator remain positive in association with the upturn out of the April 2nd trading cycle low.

10 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 also remain positive in association with the upturn out of the trading cycle low. The Ratio Adjusted McClellan Oscillator remains above the trigger line I ve added and the behavior here also continues to be suggestive of the trading cycle low. Once another daily swing high and shortterm sell signal are seen, in conjunction with a crossing of the Ratio Adjusted McClellan Oscillator below its trigger line, the market will be at risk of a left-translated trading cycle top.

11 Next is the Smoothed McClellan Oscillator, which also remains positive in association with the upturn out of the trading cycle low.

12 The Accumulation/Distribution Index remains above its trigger line and here too, the ongoing upturn out of the divergent low continues to be suggestive of the trading cycle low. In Summary: The February low marked the intermediate-term cycle low in Equities and the April 2nd daily swing low continues to be indicative of the trading cycle low. Because of the higher degree left-translated intermediate-term cycle, the expectation is for this trading cycle to be a left-translated and failed counter-trend advance. Upon the completion of a daily swing high and the triggering of a short-term sell signal, we will have to assume that this top has been seen. The market risk remains high and once another short-term sell signal and the trading cycle top are in place, this already risky setup is going to become all the more risky. Big Picture: The intermediate-term and seasonal cycle top was seen in January and the intermediate-term cycle low was seen in February. Up until this point, I have said that I do not think the higher degree 4-year cycle top has been seen. The risk of a left-translated intermediate-term cycle has now become reality. I want to reword my previous statement here and say that once a clean Primary Trend Change is seen AND confirmed by the cyclical structure with a break below the February trading and intermediate-term cycle lows, we will have to assume that the 4-year cycle top has been seen.

13 Gold End of Week Weekly Indicator Summary Intermediate-Term Neutral Primary Indicators Formation of a Weekly Swing High Cycle Turn Indicator (CTI) Neutral 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 Short Term Indicators Stochastic The trading cycle low was seen on March 20th and so far, we potentially still have a lefttranslated trading cycle top in place. The timing band for the next trading cycle low runs between April 16th and April 30th. Price is obviously now approaching the early side of the timing band for this low, but on Monday price completed the formation of another daily swing low and the additional strength on Tuesday re-triggered another short-term buy signal. The assumption is that this is another counter-trend advance, but until another daily swing high is formed and confirmed by another downturn of the daily CTI, plotted with price, this buy signal will stand as will the possibility of higher prices. Also, the intermediate-term sell signal that was triggered last week remains intact, so we have a mixed bag here as the turn continues trying to take hold. A daily swing high will be completed on Wednesday if 1, is not bettered and if 1, is violated.

14 The daily chart of the XAU is next and price continues to bounce back and forth with no real headway as Gold is once again advancing. The price action on Tuesday completed the formation of a daily swing low that was confirmed by a marginal upturn of the daily CTI and in doing so another short-term buy signal was triggered. I think this is yet another counter-trend advance, but in the meantime, this short-term buy signal will stand until another daily swing high is formed and reconfirmed by another downturn of the daily CTI. A daily swing high will be completed on Wednesday if is not bettered and if is violated. Next I have also included a chart of the HUI and in this case a short-term buy signal was triggered last Friday, but then on Monday a daily swing high and downturn of the daily CTI was seen, which re-triggered another short-term sell signal. On Tuesday a daily swing low was completed, but with the daily CTI still negative, a short-term buy signal was not re-triggered. Bottom line, the weak performance seen by the metal stocks tends to be reflective of what should be another counter-trend advance in Gold.

15 Dollar End of Week Weekly Indicator Summary Intermediate-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 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 Indicators Stochastic As discussed in the Research Letter this past weekend, Friday s reversal left the Dollar at risk of lower prices and the possibility of a failed trading cycle advance. The price action on Monday completed the formation of a daily swing high that was confirmed by a downturn of the daily CTI, which triggered a short-term sell signal. This decline has now carried the Dollar to oversold levels, per the stochastic, which makes conditions ripe for another low. In order to correct the potential of a failed and left-translated trading cycle, we must see the completion of a daily swing low and advance that carries the Dollar above the April 6th high. Otherwise, we are going to begin to see a confirmed negative intermediate-term structure, which will then point toward there being an additional intermediate-term cycle down into the higher degree seasonal and 4-year cycle low. The timing band for the next trading cycle low runs between April 23rd and May 7th. For now, this short-term sell signal stands and the Dollar. A daily swing low will be completed on Wednesday if holds and if is bettered.

16 Bonds 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 Buy 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 last trading cycle low was seen on March 21st and the timing band for the next trading cycle low runs between April 12th and May 3rd. The price action on Friday completed the formation of another daily swing low and on Monday the daily CTI, plotted with price, turned back up triggering a short-term buy signal. So far the advance out of what is now the April 5th daily swing low has been weak and structurally, we need to see the April 2nd high bettered in order to give this trading cycle a right-translated structure with regard to the higher degree intermediate-term advance.

17 Crude Oil The price action on Tuesday completed the formation of yet another daily swing low that was reconfirmed by another upturn of the daily CTI, which in turn re-triggered another short-term buy signal. At the same time, the intermediate-term sell signal from last week remains intact as the battle for this top continues. Looking at the overall cyclical picture, the January high should have ideally marked the seasonal cycle top and if not any additional advance from here above that level should be an ending move into the seasonal cycle top. Structurally, once another short-term sell signal is triggered we are going to need to see a move below the April 6th weekly price bar, as an indication that an intermediate-term top has been seen. For now, as this top continues trying to form, we have a mixed bag with a short-term buy signal and an intermediateterm sell signal. This buy signal will remain intact until another daily swing high is formed and re-confirmed by another downturn of the daily CTI. Another daily swing high will be completed on Wednesday if is not bettered and if is violated.

18 I have included the current monthly chart of Crude Oil below in order to show you the longerterm perspective with the now due seasonal seasonal cycle top, which should be followed by the decline into the 3-year cycle low in the overall commodity complex. The cyclical phasing is clear. The building of this top is simply taking its time as commodities are continuing to resist the downturn into the higher degree cycle lows Cycles News & Views; All Rights Reserved Click Below To Contact the Web Master