Cycle Turn Indicator Direction and Swing Summary. of Select Markets as of the close on. May 18, Daily Swing

Transcription

1 Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on May 18, 2018 Market Daily CTI Daily Swing Weekly CTI Weekly Swing Industrial Neutral Low Positive Low Transports Positive High Positive Low NDX Neutral High Positive Low S&P Inverse Fund Negative N/A * Negative High CRB Index Positive Low Positive Low Gold Negative High Negative High XAU Negative High Positive Low Dollar Positive Low Positive Low Bonds Positive High Negative High Crude Oil Positive High Positive Low Unleaded Positive High Positive Low Natural Gas Negative Low 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 May 20, 2018 Stocks End of Week Weekly Indicator Summary Intermediate-Term Buy/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 Bearish Bearish 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 Bearish Secondary Short Term Indicators Stochastic Bearish Cycle Momentum Indicator Bearish Trading Cycle Oscillator Bearish Momentum Indicator Bearish Ratio Adjusted McClellan Oscillator Bearish Crossover Accumulation/Distribution Index Bearish The short-term sell signals on Gold and the XAU remain intact as they approach their intermediate-term cycle lows. The triggering of a short-term buy signal and the completion of a weekly swing low are key with regard to the now due intermediate-term cycle lows. In the meantime, the sell signals stand. Crude Oil completed the formation of a daily swing high on Friday, but with the daily CTI still positive a short-term sell signal was not triggered. Once a short-term sell signal is triggered and enough weakness follows to complete the formation of a weekly swing high, the intermediate-term cycle top should be in place and the opportunity for the higher degree cycle tops will be at hand. The CRB squeaked out a short-term buy signal on Thursday, but with its reversal that followed, along with Friday s price action and the overall oscillator picture, the CRB remains nicely positioned for the completion of a daily swing high as well as a weekly swing high in association with the anticipated intermediate-term cycle top. Once a weekly swing high is in place on the CRB, the opportunity to also cap the higher degree seasonal and 3-year cycle tops will be at hand. On Thursday a short-term sell signal was

4 triggered in the Dollar, but on Friday it was reversed. Therefore, the short and intermediateterm advance in the Dollar are again in sync. Bonds should be approaching their trading cycle low, but based on the phasing of the intermediate-term cycle, there should ideally be at least one more trading cycle down into the intermediate-term cycle low. That low should then correspond with the higher degree seasonal and 3-year cycle low, but given the structural violation of the previous 3-year cycle low seen this past week, the advance out of these lows should be countertrend advances that are ultimately followed by even greater weakness. The short and intermediate-term buy signals on the Industrials remain intact and price has moved into the middle portion of the timing band for the trading cycle low, which is due by the end of May. On the Industrials the structure is still suggestive of what should be a lefttranslated intermediate-term cycle, but within the context of that cycle we have the current right-translated trading cycle. This in turn suggests that the decline into the pending trading cycle low should hold above its April 2nd low and likely above its May 3rd low as well. However, price is currently positioned very well for the completion of a weekly swing high this next week and if we do move into the trading cycle low from here, we should easily see the completion of a weekly swing high. Upon such development, price will again be positioned at that level for the next trading cycle advance to be a failure and for further weakness into the pending intermediate-term cycle low. We also still have the issue with the April 2nd low carrying the Industrials below their February low, which is indicative of a left-translated intermediate-term cycle, which is suggestive of lower prices into the intermediate-term cycle low. With this all said, the first step is the triggering of a short-term sell signal and the decline into the trading cycle low, which is now due. If another daily swing high is completed on Monday and confirmed by a downturn of ALL 3 of the Primary Short-Term Indicators, a short-term sell signal will be triggered and the trading cycle top should prove to be in place. A weekly swing high will be completed in the coming week if 24, is not bettered and if 24, is violated.

5 The first chart below shows our distribution indicator. The red intermediate-term Advancing issues line is tied to the intermediate-term cycle and it ticked back up on Friday. The green line has also ticked back up and is again sitting right on the black line. The previous upturn serves to confirm the February intermediate-term cycle low. Typically the second downturn marks the intermediate-term cycle top.

6 The Trading Cycle Oscillator in the upper window remains below its trigger line. The Momentum indicator remains below its zero line. The stochastic in the middle window continues to weaken after turning down from overbought levels. The behavior of these indicators continues to be suggestive of the trading cycle top, but we still need to see a short-term sell signal. The first of our Primary Short-Term Indicators is the New High New Low Differential, plotted with price, which has ticked back up. The Trend Indicator remains above its trigger line.

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, we should ideally have the trading cycle top in place, but until a daily swing high is formed AND confirmed by a downturn of ALL Three of the Primary Short-Term Indicators, a short-term sell signal will not be triggered. Once triggered, we should have confirmation of the trading cycle top and that the decline into the trading cycle low is at hand. Another daily swing high will be completed on Monday if 24, is not bettered and if 24, is violated.

8 Both the Intermediate Term Breadth Momentum Oscillator and the Intermediate Term Volume Momentum Oscillator remain above their trigger lines.

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 Volume Summation Index and the McClellan Summation Index still remain positive. The Ratio Adjusted McClellan Oscillator ticked back down on Thursday after moving back up to the bottom side of the trigger line I ve added and on Friday it moved ever so slightly lower. As we use this indicator, the price/oscillator picture is still positioned nicely for the triggering of a short-term sell signal and the decline into the trading cycle low. But, we have to see a daily swing high and the triggering of a short-term sell signal to kick it off.

10 Next is the Smoothed McClellan Oscillator, which remains above its trigger line.

11 The Accumulation/Distribution Index remains below its trigger line and thereby also continues to be suggestive of the trading cycle top. In Summary: The trading cycle top should ideally be in place, but we need to see the triggering of a short-term sell signal in order to confirm it. If the decline into the pending trading cycle low puts a weekly swing high into motion, which it ideally should, then the rally out of the April 2nd low should prove to have run its course and overall weakness into the intermediate-term cycle low into the June-July timeframe should ideally follow. 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 Bearish 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.

12 Our weekly chart of the Industrials is next. The price action this past week was relatively narrow. It also reversed off of its highs and closed below its open. As a result, the Industrials are positioned for an easily completed weekly swing high in the coming week, which will happen if 24, is not bettered and if 24, is violated. Nothing has changed at this level on the Industrials. The February low marked the intermediate-term cycle low and as a result of the violation of that low, even though the advance out of the April 2nd low has held on as well as it has, it should be a counter-trend advance that is followed by lower prices into the next intermediate-term cycle low. The timing band for the next intermediate-term cycle low is due between June 1st and August 3rd. Based on normal cyclical behavior in association with this left-translated intermediate-term cycle, lower prices into the next intermediate-term cycle low should be seen. To not see lower prices into the next intermediate-term cycle low in the June/ July time frame would force the April low into having marked the intermediate-term cycle low on the Industrials. The issue then becomes that the Industrials would not be in sync cyclically with all the other indexes and averages that held above their February lows and that would be an even greater oddity. Rather, it appears that what this is currently telling us is that with the Industrials, the XAL, the BKX and the HGX having violated their February low their resulting left-translated intermediate-term cycle makes them structurally weaker than the other indexes and averages that have not violated there February lows. Bottom line, we have to see what the decline into the intermediate-term cycle low yields structurally and we are now some 2 weeks away from the early side of the timing band for that low.

13 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) Bearish 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 Bearish Secondary Short Term Indicators Stochastic Bearish The trading cycle last bottomed on May 1st and the timing band for the next low runs between May 25th and June 8th. With Friday being an inside day, there were no changes. The current oscillator picture makes conditions ripe for a bounce, but with price not having moved into the timing band for the trading cycle low, any bounce from current levels should be counter-trend and should be followed by further weakness into the trading cycle low. A daily swing low will be completed on Monday if 1, holds and if 1, is bettered.

14 Next is our daily chart of the XAU and there is no change here. Because the XAU has not moved below its May 1st trading cycle low, while Gold has, it has formed a non-confirmation with Gold, which may well be indicative of the pending intermediate-term cycle lows that are due in both Gold and the XAU. For now, until a daily swing low is formed and re-confirmed by an upturn of the daily CTI, the current sell signal will stand. A daily swing low will be completed on Monday if holds and if is bettered.

15 Our weekly chart of gold is next. The timing band for the now due intermediate-term cycle low runs between April 6th and May 25th. Given this phasing, this low should occur in conjunction with the current/pending trading cycle low. Looking at the price/oscillator picture here, it does not look to be complete, but a weekly swing low is now the key. Also, in light of the higher degree intermediate-term cycle low, this trading cycle low could possibly occur early, so once a short-term buy signal is triggered and a weekly swing low is completed, the intermediate-term cycle low should be in place. A weekly swing low will be completed in the coming week if 1, holds and if 1, is bettered. More on this once this low is confirmed. For now, the focus is the completion of a weekly swing low and the establishment of the intermediate-term cycle low.

16 Next is our weekly chart of the XAU and with this past week being an inside week, there were no changes here. Per the phasing of the intermediate-term cycle low in Gold, we know that the low is now due. But, with the stochastic in neutral territory and the overall price/oscillator picture at this level, it does tend to be suggestive of lower prices. All that said, a weekly swing low and upturn of the weekly CTI in both the XAU and Gold are now the key with regard to the intermediate-term cycle low.

17 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) 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 price action on Friday completed the formation of a daily swing high that was confirmed by a marginal downturn of the daily CTI, plotted with price, which triggered a short-term sell signal. As a result, I explained in the Thursday night update that the Dollar was at risk of a lefttranslated trading cycle top and that the structural developments over the next several days would be key. I also said that in the event of further weakness on Friday, the assumption would have to be that we had a left-translated trading cycle top. As it turns out, the price action on Friday completed the formation of another daily swing low that was reconfirmed by another upturn of the daily CTI, which re-triggered another short-term buy signal. The Dollar has obviously had a very strong advance and is now approaching the timing band for the intermediate-term cycle low, which suggests that the higher degree intermediate-term cycle top is due with either this trading cycle top or the next. Bottom line, until another daily swing high is formed and re-confirmed by another downturn of the daily CTI, this buy signal will stand. Once a short-term sell signal is triggered, if the decline that follows completes the formation of a weekly swing high, then we should have the intermediate-term cycle top in place. Another daily swing high will be completed on Monday if is not bettered and if is violated.

18 Next is our weekly chart of the Dollar. The last intermediate-term cycle low was seen on February 16th and the timing band for the next intermediate-term cycle low runs between June 8th and July 27th. Structurally, this intermediate-term cycle advance is right-translated, which is indicative of the anticipated higher degree seasonal cycle low, which given the overall cyclical phasing, is indicative of the higher degree 4-year cycle low. Again, this should ideally be the last trading cycle up into the intermediate-term cycle top, but given the Dollar s strength we cannot rule out yet another trading cycle up. Regardless, the key is the completion of a weekly swing high. Once a short-term sell signal is triggered and a weekly swing high is completed, this top should be in place. Also, a left-translated trading cycle top will be further suggestive of the intermediate-term cycle top as well. Whether the pending intermediate-term cycle top comes in conjunction with the current trading cycle top or the next, the decline into the intermediate-term cycle low is expected to be a counter-trend move that is followed by higher prices in conjunction with the advancing higher degree seasonal and 4-year cycle. The longer-term out look for the Dollar is very positive.

19 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) Bearish 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 Bearish Secondary Short Term Indicators Stochastic The short-term sell signal remains intact and the timing band for the pending trading cycle low runs between May 16th and June 6th. Given the current oscillator picture and this cyclical phasing, once a daily swing low is formed and confirmed by an upturn of the daily CTI, plotted with price, the trading cycle low should be in place. As a result of the higher degree developments this week, the advance out of this trading cycle low should be another failed and left-translated advance that is followed by lower prices into the next intermediate-term cycle low.

20 Our weekly chart of bonds is next. The timing band for the current intermediate-term cycle low ran between February 16th and May 11th. As a result of the February 23rd weekly swing low it originally appeared as if that low marked the intermediate-term cycle low. However, with price still operating within the timing band for the low we also knew there was a possibility of another push down into the latter portion of the timing band. Once the advance out of the February 23rd weekly swing low began to fail, in trying to give Bonds the benefit of the doubt with regard to the higher degree cycle lows, the assumption was that we were seeing an additional push down into the latter portion of the timing band. Then, with the completion of a weekly swing low and intermediate-term buy signal the week of May 4th, it began to look as if the April 27th weekly swing low marked the intermediate-term cycle low. However, I explained here in the update last weekend that the current trading cycle advance should serve to confirm this phasing and in light of the failure of the trading cycle advance out of the April low, we have to assume that the February low marked the intermediate-term cycle low and that we now have a failed and lefttranslated intermediate-term cycle at play. Based on this phasing, the timing band for the next intermediate-term cycle low runs between June 15th and September 7th. The only other possible alternative here is that this intermediate-term cycle is running a little long. But, until Bonds can prove that to be the case, the assumption is that we have a failed and left-translated intermediate-term cycle at play and that there is at least one more trading cycle down into the intermediate-term cycle low. IF the advance out of the pending trading cycle low unfolds with a right-translated structure that is also accompanied by an intermediate-term buy signal, then upon such developments we will evaluate the possibility of a slightly long intermediate-term cycle. Regardless, the next intermediate-term cycle low should coincide with the higher degree seasonal and 3-year cycle low. Therefore, a higher degree clustering of lows is still in the making. But, in light of the structural violation of the previous 3-year cycle low for the first time since 1981, the advance out of the pending higher degree lows should now be higher degree counter-trend advances that are followed by lower prices and higher rates.

21 Crude Oil The May 14th short-term buy signal remains intact, but per the continued weakening of the stochastic from overbought levels, conditions also remain ripe for the decline into the trading cycle low. The pending trading cycle top will be an opportunity for the higher degree cycle tops, but we must see the completion of a weekly swing high in order for the required structure of the higher degree turns to take hold. Crude Oil did complete the formation of a daily swing high on Friday, but with the daily CTI still positive, a short-term sell signal was not triggered. Any further weakness on Monday that turns the daily CTI down will trigger a short-term sell signal. However, we must see a short-term sell signal that is followed by enough weakness to complete the formation of a weekly swing high before there is evidence of a more meaningful top in the making.

22 Next is our weekly chart of Crude Oil. No change at this level. The April 13th intermediateterm buy signal remains intact and will until a weekly swing high is formed and confirmed by a downturn of the weekly CTI. We know that the higher degree seasonal cycle low was seen in June 2017 and with the next seasonal cycle low ideally due in or around the June/July 2018 timeframe, Crude Oil should now be near its seasonal cycle top. This top tried to take hold as a result of the February completion of a monthly swing high, but the intermediate-term advance out of the February low managed to carry Crude Oil higher in conjunction with what should be the last intermediate-term advance within this seasonal cycle. The expectation is for this intermediate-term cycle top to coincide with the higher degree seasonal cycle top. If the decline out of the intermediate-term cycle top completes the formation of a monthly swing high, then we should have the higher degree seasonal cycle top in place. But, in addition to the seasonal cycle top, we also have the 3-year cycle low in the overall commodity complex that is ideally due in late Therefore, this seasonal cycle top should also coincided with the higher degree 3-year cycle top as well. The key now is the decline into the pending trading cycle low. If it completes the formation of a weekly swing high and the triggering of an intermediate-term sell signal, then upon that development the opportunity for the higher degree cycle tops to take root will be at hand. A weekly swing high will be seen in the coming week if is not bettered and if is violated.

23 CRB Index Next is a monthly chart of the CRB Index showing the ebb and flow of the 3-year cycle. There is no question that the CRB is pressing into the 3-year cycle top or that the 3-year cycle low is due in the late 2018 to early 2019 timeframe. Once this top is in place, I suspect that all asset classes will be subject to come under pressure. Once a monthly swing high is formed, this top should be in place Cycles News & Views; All Rights Reserved Click Below To Contact the Web Master timwood1@cyclesman.com