Cycle Turn Indicator Direction and Swing Summary. of Select Markets as of the close on. October 5, 2017

Transcription

1 Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on October 5, 2017 Market Daily CTI Daily Swing Weekly CTI Weekly Swing Industrial Positive Low Positive Low Transports Negative High Positive Low NDX Positive Low Positive Low S&P Inverse Fund Negative N/A * Negative High CRB Index Positive Low Negative High Gold Negative High Negative High XAU Positive Low Negative High Dollar Positive Low Positive Low Bonds Positive High Negative High Crude Oil Negative Low Positive High Unleaded Positive Low Negative High Natural Gas Positive Low Negative 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 October 5, 2017 Stocks End of Week Weekly Indicator Summary Intermediate-Term Buy/Neutral Primary Indicators Formation of a Weekly Swing High Bearish 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 Bearish Stochastic Cycle Momentum Indicator *When this indictor is it is negative for the market and visa versa. Daily Indicator Summary Short-Term Buy/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 Bearish Secondary Short Term Indicators Stochastic Bearish Cycle Momentum Indicator Trading Cycle Oscillator Momentum Indicator Ratio Adjusted McClellan Oscillator Bearish Crossover Accumulation/Distribution Index Bearish Still no change with gold in that both the short and intermediate-term sell signals in remain intact and we should not only have the intermediate-term cycle top in place, but also the higher degree seasonal cycle top. If so, this will cap the overall advance out of the December low, which should in turn lead to the decline into the final seasonal cycle low within the current 9-year cycle. Tuesday s short-term buy signal on the XAU remains intact, but the price/oscillator picture suggests that this advance is running out of steam. All the while, the intermediate-term sell signal on the XAU remains intact. We saw a short-term buy signal on the CRB on Thursday, but this is expected to be a counter-trend advance and so far, in spite of this bounce we also continue to have an intermediate-term sell signal in the making. A daily swing low was completed in crude oil on Thursday and any further advance on Friday will likely trigger a short-term buy signal. A short-term buy signal was triggered in gasoline on Thursday, but I suspect that these counter-trend bounces are simply noise related with regard to the storm in the Gulf. The Dollar triggered a short-term sell signal on Wednesday, but then another short-term

4 buy signal on Thursday. It is possible that Wednesday s low marked a very shallow trading cycle low and if it did the dollar is even more bullish that I thought. More on that below. Bonds, we are still looking for the trading cycle low and I m increasingly thinking that this is also the intermediate-term cycle low as well. Equities, there is no change in that the push continues. The timing band for the trading cycle low runs between September 29th and October 19th. Once a daily swing high is formed and confirmed by a downturn of ALL Three of the Primary Short-Term Indicators, the trading cycle top should be in place. Until then, the ongoing short-term buy signal will continue to stand and higher prices will remain possible. Intermediate-term, the buy signal in association with the advance out of the August 21st intermediate-term cycle low also remains intact. As I have said here for a while now, with the loss of both the Intermediate-Term AD Line non-confirmation, as well as the Dow Theory nonconfirmation, every indication is that this topping process is not yet complete and as a result, there should be further strength following the decline into the pending trading cycle low, so that these markers will have the opportunity to reappear. The October research letter will be out Sunday evening. I ve had some sort of a flu bug, so I m a little behind on everything. Therefore, it may be later Sunday afternoon before I get it posted. Also, Peter Eliades and I are planing to do an interview sometime next week. We are also going to try to set something up with John Hussman soon, as well.

5 The first chart below shows our distribution indicator. No change here. The red intermediateterm Advancing issues line is tied to the intermediate-term cycle, which continues higher. Obviously this indicator is now confirming the additional push up in equities. That said, I continue to stress that commodities are the key. So far, they are weakening. If they begin to confirm, then this is going to evolve into the 1927 scenario, but if they continue to weaken, then we should assume that the 1929 scenario is more likely on track and we should see this indicator also begin to soften and confirm as the overall divergence with the green and black lines hold. More on this all later.

6 The Trading Cycle Oscillator in the upper window remains above its trigger line. The Momentum indicator also remains above its zero line. The stochastic in the middle window has turned marginally below its trigger line from overbought levels. The overall behavior of these indicators continues to be suggestive of the trading cycle top, but until we see a short-term sell signal we cannot say that this top is in place. The Trend Indicator remains positive. The first of our Primary Short-Term Indicators is the New High New Low Differential, plotted with price, which turned marginally lower on Thursday.

7 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, until we see the completion of a daily swing high that is confirmed by a downturn of ALL Three of the Primary Short-Term Indicators, a short-term sell signal will not be triggered. Another daily swing high will be completed on Thursday if 22, is not bettered and 22, is violated.

8 Both the Intermediate Term Breadth Momentum Oscillator and the Intermediate Term Volume Momentum Oscillator still remain above their trigger lines in association with the advance out of the August 21st low. A downturn by these indicators, in association with a short-term sell signal, will be indicative of the trading cycle top.

9 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 Summation Index and the McClellan Volume Summation Index remain positive. Here too, a downturn of these indicators will be suggestive of the trading cycle top. The Ratio Adjusted McClellan Oscillator has crossed below its trigger line. As I said when price failed to turn in conjunction with the initial downturn of this indicator and the divergence began to form, we knew then that we were once again in for a slower forming top, which is exactly what we are seeing. Once a short-term sell signal is formed in conjunction with a crossing below the trigger line, we should have the trading cycle top in place.

10 Next is the Smoothed McClellan Oscillator, which remains above the trigger line I ve added. A cross below the trigger line here will be suggestive of the trading cycle top as well.

11 The short-term Accumulation/Distribution Index remains slightly below its trigger line, which is suggestive of the now due trading cycle top. In Summary: There has still been no change in that price continues pushing into the timing band for the trading cycle top and the oscillator picture remains ripe for that top. But, we must see the completion of a daily swing high and downturn of ALL Three of the Primary Short-Term Indicators in order to trigger a short-term sell signal. Once this happens, we should have confirmation of the trading cycle top. Also, as I have been saying here, based on current evidence, I do not think that the overall topping process is complete with regard to the higher degree top. Bigger Picture: As discussed in the September research letter, the Babson pattern has been at play for some 10 years and based on the behavior of commodities up until this point, there is no indication that it isn t still at play. In fact, the current behavior is extremely similar at this point. I again urge you to please review the current comparison in the September letter. I have said all summer that commodities were key and that we were dealing with either a 1927 or a 1929 scenario. Either way, as a result of the loss of the Intermediate-Term A/D Line and its continued confirmation of new highs, the markets are in a position for the forced conclusion and confirmation of one scenario or the other.

12 Gold End of Week Weekly Indicator Summary Intermediate-Term Sell Primary Indicators Formation of a Weekly Swing High Bearish Cycle Turn Indicator (CTI) Bearish Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Bearish Secondary Indicators Stochastic Bearish Daily Indicator Summary Short-Term Sell Primary Indicators Formation of a Daily Swing High Bearish Cycle Turn Indicator (CTI) Bearish Confirming Indicators Trend Indicator (TI) Bearish Cycle Momentum Indicator Secondary Short Term Indicators Stochastic The timing band for the trading cycle low ran between September 1st and September 15th. So far, the evidence continues to suggest that this cycle ran a few trading days long, that the low was seen on September 21st and that we consequently have a failed and left-translated trading cycle at play. The price/oscillator picture this week suggests that gold is trying to bounce, but so far that bounce has not been able to take root. It may prove that some other short-term phasing is at play, but until it does the only structural evidence we have is that this phasing is correct. Based on our higher degree expectation, and the intermediate-term sell signal that is also in place, any bounce should prove to be counter-trend. Bottom line, in light of these developments, until we see evidence to the contrary, we must assume that we have a failed and left-translated trading cycle at play and our ongoing short-term sell signal will stand until another daily swing low is formed and confirmed by an upturn of the daily CTI, plotted with price. A daily swing low will be completed on Friday if 1, holds and if 1, is bettered.

13 I have again included a daily chart of the XAU. The evidence continues to be suggestive of the September 21st low having marked the trading cycle low and on Monday we saw a violation of that low. On Tuesday price completed the formation of a daily swing low that was confirmed by an upturn of the daily CTI, which triggered a short-term buy signal, which left the XAU positioned for a bounce. This bounce has carried price to modestly overbought levels, per the stochastic and given the reversal seen on Thursday, the price/oscillator picture suggests that this advance may be trying to fade sooner rather than later. Any further decline on Friday that turns the daily CTI down will retrigger another short-term sell signal. More on this as it develops.

14 Dollar 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) Bearish 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 Bearish The timing band for the trading cycle low runs between October 4th and October 18th. The price action on Wednesday completed the formation of a daily swing high that was confirmed by a downturn of the daily CTI, plotted with price, which triggered a short-term sell signal. This was then followed by another daily swing low and an upturn of the daily CTI on Thursday, which retriggered another short-term buy signal. It is possible that Wednesday s low could have marked the trading cycle low, but if that is so, then the dollar is acting far more bullish than even I imagined. In light of this one day sell signal, we need to see more evidence in order to confirm whether or not that was a trading cycle low. Any further advance from here over the next few days will begin to tip the scales in that direction and any further weakness should lead to a more concise trading cycle low. More on this phasing as this picture clarifies itself. For now, we have another short-term buy signal and regardless of the phasing of the trading cycle, higher prices are anticipated with regard to the higher degree cycle lows. A daily swing high will be completed on Friday if is not bettered and if is violated. Stay tuned!

15 Bonds End of Week Weekly Indicator Summary Intermediate-Term Sell Primary Indicators Formation of a Weekly Swing High Bearish Cycle Turn Indicator (CTI) Bearish Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Bearish Secondary Indicators Stochastic Bearish Daily Indicator Summary Short-Term Sell Primary Indicators Formation of a Daily Swing High Bearish Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Bearish Cycle Momentum Indicator Secondary Short Term Indicators Stochastic The timing band for the current trading cycle low ran between September 6th and September 26th. No change here in that we are still looking for the trading cycle low and the question continues to be if the trading cycle low was seen on September 21st, in which case we have a failed and left-translated trading cycle at play, or whether the trading cycle low is now being seen. While, the divergent oscillator picture suggests that the trading cycle low is now forming, until this proves to be the case with hard structure, we must assume that the low was seen on September 21st and that we have a failed trading cycle advance at play. Bottom line, the overall price/oscillator picture is now tipping the scales in favor of the trading cycle low now occurring, but we have to see the proof. 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 we will reassess the cyclical phasing at that time. More on this as it develops.

16 Crude Oil The decline out of the trading cycle top has thus far been rather mild, but it did carry price to oversold levels and on Thursday price completed the formation of a daily swing low. I haven t heard any news, but this is probably related to the storm in the Gulf. Any further advance that turns the daily CTI up will trigger a short-term buy signal, but any further advance should also ideally be counter-trend and best case scenario it should prove to be a retest in conjunction with the intermediate-term and seasonal cycle top. More on this as it develops. A daily swing high will be re-formed on Friday if is not bettered and if is violated.

17 Gasoline We are also seeing a bounce in gasoline. In this case, the price action on Thursday completed the formation of a daily swing low that was confirmed by an upturn of the daily CTI, plotted with price. In doing so, a short-term buy signal was triggered. As stated above with regard to crude oil, this should be a counter-trend advance Cycles News & Views; All Rights Reserved Click Below To Contact the Web Master tim@cyclesman.com