Cycle Turn Indicator Direction and Swing Summary. of Select Markets as of the close on. November 16, Daily CTI. Swing

Transcription

1 Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on November 16, 2018 Market Daily CTI Daily Swing Weekly CTI Weekly Swing Industrial Negative Low Negative High Transports Positive High Positive Low NDX Negative High Negative High S&P Inverse Fund Negative N/A * Negative Low CRB Index Positive Low Negative High Gold Positive Low Negative High XAU Positive Low Negative High Dollar Negative High Positive Low Bonds Positive Low Positive Low Crude Oil Positive High Negative High Unleaded Positive High Negative High 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 2018 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 2018 by Tim Wood 4

3 Stocks End of Week Intermediate-Term Indicator Summary Intermediate-Term Neutral 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. November 18, 2018 Daily Indicator Summary Short-Term Sell/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 The price action on Friday completed the formation of a daily swing low on the Industrials, the S&P 500 and the NYSE, but with the daily Cycle Turn Indicators remaining negative, a short-term buy signal was not triggered. The price action this past week also completed the formation of weekly swing highs that were reconfirmed by downturns of the weekly CTI, which re-triggered intermediate-term sell signals. With this short-term rally trying to take hold just as the intermediate-term advance is trying to fail, the battle to hold the October low is obvious. On that note, I want to point out the timing of the news on the China tariffs right as Equities were sliding toward their October lows. Overall, the higher degree setup is continuing to fall into place. The evidence suggests that the 4-year cycle tops have been seen on the many leading Equity related indexes, averages and sectors. Yet, the mainstream US markets, the Industrials and the S&P, for the most part have continued to provide cover to the higher degree setup, while at the same time they also continue to follow. All in all, we still need to see this higher degree setup confirmed on the Industrials, but at the same time any further strength at this point should prove to be noise and confusion as the higher degree setup Copyright 2018 by Tim Wood 5

4 continues taking hold. Structurally, the October 29th low marked the trading cycle low with Friday marking the 14th day of the current cycle. The next trading cycle low is ideally due between December 7th and December 27th. The timing band for the intermediate-term cycle low runs between October 17th and December 19th. Depending on when the next trading cycle low is seen, it may be possible that the intermediate-term cycle low proves to bottom in conjunction with that low. However, based on the weekly swing low and intermediate-term buy signal that was seen in conjunction with the advance out of the October low, the evidence suggests that the intermediate-term cycle low was seen on October 29th. If so, the intermediate-term sell signal seen this past week now suggests that we have a failed and left-translated intermediate-term cycle at play. This phasing should clarify itself as we move into the next trading cycle low, but in the meantime the assumption is that the low was seen the week of October 29th. As a result, the risk at this juncture remains high with regard to a possible failing and left-translated intermediate-term cycle top. The short-term buy signal on Gold and the XAU remains intact, but we also have intermediate-term sell signals in place. Based on the higher degree structure, this should prove to be another counter-trend advance. Short-term, Crude Oil continues trying to bounce, but both the short and intermediate-term sell signals remains intact. As a result of the higher degree structure, here too, any advance should prove to be counter-trend. The CRB Index triggered a short-term buy signal, which is reflective of the bounce we are seeing in Gold and Crude Oil. But, again, based on the higher degree cyclical structure, this should prove to be counter-trend. The short-term sell signal on the Dollar remains intact in association with the trading cycle top. If a weekly swing high and intermediate-term sell signal is seen in conjunction with the decline into the trading cycle low, then this should also prove to have marked the intermediate-term cycle top. Looking at the intermediate-term price/oscillator picture on the Dollar, this should ideally prove to be the case. The short-term buy signal in Bonds remains intact and we saw the completion of another weekly swing low this past week, which is further suggestive of the intermediate-term cycle low. With regard to the higher degree intermediate-term cycle low, this trading cycle advance now needs to carry price above the previous trading cycle top and it needs to unfold with a right-translated structure. Longer-term, in light of the higher degree seasonal and 3-year cycle tops, this intermediate-term advance should ultimately prove to be counter-trend. Copyright 2018 by Tim Wood 6

5 The first chart below shows our distribution indicator. The red intermediate-term Advancing issues line is tied to the intermediate-term cycle, which has turned back up. I have said before that the cross above the black MA line was suggestive of the October low having marked the intermediate-term cycle low and now with the green line turning up and sitting right on the black, the evidence is increasingly suggestive of that having been the case. The question now is, how quickly does this intermediate-term advance fail? Copyright 2018 by Tim Wood 7

6 The Trading Cycle Oscillator in the upper window has turned slightly above its trigger line. The Momentum indicator in the upper window remains below its trigger line. The stochastic in the middle window ticked up on Thursday and remains positive. The first of our Primary Short-Term Indicators is the New High/New Low Differential, plotted with price, which has also turned up. The Trend Indicator has crossed back below its trigger line. Copyright 2018 by Tim Wood 8

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, the short-term sell signal remains in force and will continue to do so until a daily swing low and upturn of ALL Three of the Primary Short-Term Indicators is seen. In the meantime, the risk continues to be of a left-translated trading and intermediate-term cycle top, which, until proven otherwise, we have to assume is in the making. Copyright 2018 by Tim Wood 9

8 The Intermediate Term Breadth Momentum Oscillator remains below its trigger line, but the Intermediate Term Volume Momentum Oscillator has turned marginally back above its trigger line. The upturn in association with the October low is reflective of the trading and intermediate-term cycle lows. Copyright 2018 by Tim Wood 10

9 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 ticked back up. The recent advance carried the Ratio Adjusted McClellan Oscillator to the most overbought level since February/March On Thursday we saw an upturn as this indicator began to bounce off of the zero line and on Friday it was again slightly higher. Overall, the price/oscillator picture continues to warn of a potentially failed and left-translated trading and intermediate-term cycle top, but until another daily swing high is completed, this short-term advance has the structure beneath it for the bounce to continue. Copyright 2018 by Tim Wood 11

10 Next is the Smoothed McClellan Oscillator, which remains marginally positive. Copyright 2018 by Tim Wood 12

11 The Accumulation/Distribution Index has turned marginally above its trigger line. Copyright 2018 by Tim Wood 13

12 Our weekly chart of the Industrials is next. Again, the timing band for the intermediate-term cycle low runs between October 17th and December 19th. With the price action the week of November 9th completing the formation of a weekly swing low that was confirmed by an upturn of the weekly CTI, the price/oscillator picture suggests that the intermediate-term cycle low was seen on October 29th. Now, with the price action this past week completing the formation of a weekly swing high that was been confirmed by a downturn of the weekly CTI, another intermediate-term sell signal has been triggered. Consequently, one of two things is going on. Either we are seeing another push down into the intermediate-term cycle low, or the intermediateterm advance is already beginning to fail. Until we get through the remainder of the timing band for this low and we see what this trading cycle yields, in all reality it could be either. With that said, we have been operating under the assumption that the intermediate-term cycle low was seen on October 29th and now given the behavior of the green and black MA lines in the first chart above, the evidence is in fact further suggestive of the intermediate-term cycle low having been seen. Obviously as a result of the weekly swing high and intermediate-term sell signal this past week, this cycle is now at risk of a left-translated top. Copyright 2018 by Tim Wood 14

13 Next is the current monthly chart of the NYSE, which is suggestive of the 4-year cycle top having been seen. Big picture: I think we have probably rounded the curve, but we still have to see the structural evidence on the Industrials and the S&P. I first saw this higher degree topping process with the peaking of Commodities, the bottoming of the Dollar and the peaking of Equities coming together in September 2017, at which time I explained the Babson scenario. As the Dollar made the final push into its 4-year cycle low in February, I explained that a higher degree turn was setting up in Commodities, Equities and most all other asset classes. Since then, we have in fact seen a higher Dollar and it was from the February low in Equities that the series of left-translated intermediate-term cycles began setting up in the leading Equity related indexes, averages and sectors. The 3-year cycle top in the CRB was seen in May, but Crude Oil managed to linger with another couple of pushes to marginally higher highs in July and again in October before succumbing to the higher degree 3-year cycle top. Regardless, the anticipated 3-year cycle top has proven to have been in the making and all of a sudden, Crude Oil is now at a 12 month low, as is Gasoline. At the same time, while the Industrials and S&P have been and continue to be the hold out, the overall setup with Equities continues to slowly take form. The STOXX 600, the Dow Jones World Index and the NYSE World Leaders look to be ominous. Once the setup in the US Equity markets is complete, it is my belief that the resulting risk will be greater than at any other time in US stock market history. More on all of that later. Copyright 2018 by Tim Wood 15

14 In Summary, we do now have a daily swing low in place, but the ongoing short-term sell signal remains in force and the market remains at risk of both a failed and left-translated trading and intermediate-term cycle. Further structural confirmation of these potential failures is still required, but based on the current price/ oscillator picture and the accompanying cyclical phasing, this setup is certainly on the table. Until we see structural evidence to negate or at least neutralize the current price/oscillator picture, the market is vulnerable and the risk here is high. Bigger picture, per the list in the November research letter, the 4-year cycle top should be in place and while the Industrials are expected to follow, the setup there is not yet complete. Copyright 2018 by Tim Wood 16

15 Gold End of Week Intermediate-Term Indicator Summary Intermediate-Term Sell Daily Indicator Summary Short-Term Buy/Neutral Primary Indicators Formation of a Weekly Swing High Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Indicators Stochastic 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 Per the Tuesday night update, we knew that Gold was short-term oversold and that the price/oscillator picture was ripe for a bounce. Then, per the parameters given here on Tuesday night, a daily swing low was competed on Wednesday and confirmed by an upturn of the daily CTI. In doing so, a short-term buy signal was of course triggered. But, with the last trading cycle low having occurred on October 31st and with the violation of the October 31st low on November 9th, every indication is that we have a failed and lefttranslated trading cycle at play. Therefore, this short-term buy signal should prove to be counter-trend and should be followed by lower prices. The structure here is clear, so in the event we see something to the contrary, then something else is going on. The timing band for the next trading cycle low runs between November 26th and December 10th. A daily swing high will be completed on Monday if 1, is not bettered and if 1, is violated. Copyright 2018 by Tim Wood 17

16 Next is our weekly chart of Gold. The intermediate-term cycle low last bottomed on August 16th and based on the evidence with regard to the higher degree cycle tops, the expectation has been for the advance out of that low to be counter-trend. The price action the week of November 2nd completed the formation of a weekly swing high and as a result of the downturn of the weekly CTI, plotted with price, the week of November 9th, an intermediate-term sell signal was triggered and the intermediate-term cycle top should be in place. Therefore, every indication is that the counter-trend advance should have runs its course. Price did reverse off of its lows this past week, but with the timing band for the next intermediate-term cycle low running between December 7th and January 25th, the intermediate-term cycle low should still lie ahed. With the last seasonal cycle low having occurred in December, the decline into this intermediate-term cycle low should carry Gold down into the higher degree seasonal cycle low. Given the evidence with regard to the 9-year cycle top, the intermediate-term sell signal and the timing for the next seasonal cycle low, the down turn out of this intermediate-term cycle top collectively leaves Gold set up in a bearish position. In the event there should ideally be additional strength here it should be a retest of the high. Copyright 2018 by Tim Wood 18

17 Dollar End of Week Intermediate-Term 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 Indicators Stochastic Wednesday s short-term sell signal remains intact and with the timing band for the trading cycle low running between November 9th and November 23rd, the assumption is that the trading cycle top was seen on November 12th and that the Dollar is now moving into the trading cycle low. The alternative phasing here is that the November 7th daily swing low marked a slightly early trading cycle low, which in this case would leave the Dollar at risk of a left-translated trading cycle top. Either way, this phasing should clarify as we move through this timing band. In the meantime, we have a short-term sell signal and regardless of the phasing of the trading cycle, we should be moving into the trading cycle low. If a weekly swing high is formed in association with this short-term sell signal, then the evidence will be suggestive of the intermediate-term cycle top. More on all of this as it develops. A daily swing low will be completed on Monday if holds and if is bettered. Copyright 2018 by Tim Wood 19

18 Next is our weekly chart of the Dollar and while our intermediate-term buy signal remains intact, the price/ oscillator picture is certainly suggestive of the intermediate-term cycle top. The timing band for the pending intermediate-term cycle low runs between November 2nd and December 21st. Any further weakness in association with the decline out of the trading cycle top that completes the formation of a weekly swing high will certainly be further indicative of the intermediate-term cycle top. This will happen in the coming week if is not bettered and if is violated. There is a possible alternative phasing, but until the current phasing proves inapplicable, this phasing will remain our primary phasing. At a higher level, I remind you that the bettering of the August high the week of November 2nd was a major hurdle that served to further confirm the higher degree 4-year cycle low and overall higher prices in association with the higher degree advance are expected. Copyright 2018 by Tim Wood 20

19 Next I have included a weekly chart of the CRB Index. As a result of the violation of the August low this past week, the advance out of the August low has obviously proven to have been counter-trend, as was anticipated. Looking at the price oscillator picture here, a bounce at this level is now possible. Should a bounce take hold here, knowing that the Dollar should be at or near its intermediate-term cycle top, then opposing counter-trend moves in both Commodities and the Dollar should be seen. A weekly swing high in the Dollar and a corresponding weekly swing low in the CRB is of course key. Copyright 2018 by Tim Wood 21

20 Bonds End of Week Intermediate-Term 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 short-term buy signal and advance out of the November 7th trading cycle low remains intact and this advance is looking better. But still, with the October trading cycle low having marked the intermediate-term cycle low, this trading cycle advance needs to better the previous trading cycle top and it still needs to unfold with a right-translated structure. Until that happens, there is still a risk of a failed and left-translated trading cycle, which would in turn leave bonds set up with a failed and left-translated intermediate-term cycle top. More on this once we see the level at which this trading cycle top occurs. This remains a critical juncture for Bonds, but in the meantime, the short-term buy signal will stand until a daily swing high and downturn of the daily CTI is seen. Copyright 2018 by Tim Wood 22

21 Next is our weekly chart of Bonds and the timing band for this low runs between August 31st and November 23rd. The ongoing intermediate-term buy signal remains intact and the price action this past week completed the formation of another weekly swing low after a retest of the October 9th trading and intermediate-term cycle low. At a higher level, the evidence suggests that we have a failed and lefttranslated seasonal and 3-year cycle top in place. For this reason, the advance out of this intermediate-term cycle low should prove to be counter-trend. But, until another weekly swing high is formed and confirmed by a downturn of the weekly CTI, plotted with price, this intermediate-term buy signal will stand. Structurally, a failed or left-translated trading cycle top is also key with regard to an intermediate-term cycle top and it is for this reason we need to see the current trading cycle advance continue higher. For now, we have both short and intermediate-term buy signals in place. Stay tuned! Copyright 2018 by Tim Wood 23

22 Crude Oil The oscillator picture has told us that a short-term low has been trying to take hold and we have seen a bit of a bounce. But, it is because of Tuesday s broad range that a daily swing low has not been completed and for this reason, the October 4th short-term sell signal remains intact. As a result of the ongoing intermediateterm sell signal and the structural developments with regard to the higher degree seasonal and 3-year cycle top, any additional strength should still be counter-trend. Copyright 2018 by Tim Wood 24

23 Next is our weekly chart of Crude Oil. The intermediate-term sell signal remains intact and has carried price below the previous two intermediate-term cycle lows, which I again point out is the first time we have seen a violation of a previous intermediate-term cycle low since the June 2017 seasonal cycle low. Shortterm, note that we are seeing this bounce just as price is approaching the support level, per the blue line. Cyclically, Crude Oil should be at or near an intermediate-term cycle low and once a weekly swing low is formed and confirmed by an upturn of the weekly CTI, an intermediate-term buy signal will be triggered and this low should be in place. However, given the cyclical phasing and expectation of the higher degree seasonal and 3-year cycle top, any advance should prove to be counter-trend. More on that once a weekly swing low is seen. For now, this intermediate-term sell signal stands Cycles News & Views; All Rights Reserved timwood1@cyclesman.com Copyright 2018 by Tim Wood 25

24 Copyright 2018 by Tim Wood 26