Cycle Turn Indicator Direction and Swing Summary. of Select Markets as of the close on. January 25, Daily CTI. Swing

Transcription

1 Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on January 25, 2019 Market Daily CTI Daily Swing Weekly CTI Weekly Swing Industrial Positive Low Positive Low Transports Positive Low Positive Low NDX Positive Low Positive Low S&P Inverse Fund Negative N/A * Negative High CRB Index Positive Low Positive Low Gold Positive Low Positive Low XAU Positive Low Negative High Dollar Negative High Positive Low Bonds Positive High Negative High Crude Oil Positive Low Positive Low Unleaded Negative High Positive Low Natural Gas Negative 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 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 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 Stochastic Cycle Momentum Indicator *When this indictor is it is negative for the market and visa versa. January 27, 2019 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 Secondary Short Term Indicators Stochastic Cycle Momentum Indicator Trading Cycle Oscillator Momentum Indicator Ratio Adjusted McClellan Oscillator Crossover Accumulation/Distribution Index The short and intermediate-term buy signals in association with the trading and intermediate-term cycle advance out of the December low in Equities remains intact. The short-term oscillator picture is conducive of a top and the expectation continues to be that this is a counter-trend advance and that the higher degree cycle lows should ideally still lie ahead. This also continues to be a technical juncture for the trading cycle top, which will also be an opportunity to cap the intermediate-term cycle advance. But, until a daily swing high and downturn of the Primary Short-Term Indicators is seen, higher prices will remain possible. At the same time, because of the evidence with regard to the higher degree cycle lows still lying ahead, this technical juncture in association with the trading cycle top leaves Equities in a risky position. The price action on Friday completed the formation of a daily swing low in Gold, which triggered a shortterm buy signal in association with the trading cycle low. With regard to the intermediate-term sell signal that was trying to develop this past week, Friday s advance blew it out. The XAU also triggered a short- Copyright 2018 by Tim Wood 5

4 term buy signal on Friday in association with its trading cycle low. The intermediate-term sell signal on the XAU remains intact and this trading cycle advance is a test with respect to the intermediate-term cycle top, which is due in both Gold and the XAU. Crude Oil remains on a buy and as of the close on Friday is positioned to move higher, but overall is also at a juncture in which a top should be trying to form. The short-term sell signal in Gasoline remains intact and the expectation is for Crude Oil to follow. A short-term buy signal was triggered on the CRB Index and it too, is re-positioned for higher prices. If this bounce fades and leaves a left-translated structure in place, we should have the intermediate-term top. Otherwise, the intermediate-term advance will remain intact. The Dollar 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, which in turn leaves the Dollar at risk of a left-translated structure and another trading cycle down into the intermediate-term cycle low. The trading cycle low in Bonds was seen on January 18th and with Friday completing the formation of a daily swing high, they too, are also at risk of a left-translated trading cycle top and further weakness into the higher degree intermediate-term cycle low. It appears the as if the Dollar and Bonds are trying to set up for another leg down into their intermediate-term cycle lows as Gold and commodities make an additional push up into their intermediate-term cycle tops. Below is our distribution indicator. The red intermediate-term Advancing issues line is tied to the intermediate-term cycle, which after violating its October low, bettered its December high and which is again turning back up. Looking back into the 1920 s, there are limited occurrences of such patterns. Of the dozen or so patterns I found, a couple of them were associated with lows, but the vast majority were associated with counter-trend advances that were followed by lower lows. Shorter-term, this indicator has moved to another new high in association with this advance. The green MA line has crossed above the black MA line. Given that the December low has proven to have marked the intermediate-term cycle low, another downturn below the black MA line will be indicative of the intermediate-term cycle top. Copyright 2018 by Tim Wood 6

5 The Trading Cycle Oscillator in the upper window remains marginally below its trigger line. The Momentum indicator in the upper window remains above its zero line, but continues to weaken. The stochastic in the middle window has ticked marginally back up, but overall continues to weaken. The first of our Primary Short-Term Indicators is the New High/New Low Differential, plotted with price, which has ticked back up. Overall, these indicators continue to be suggestive of the trading cycle top. The Trend Indicator remains positive in association with the advance out of trading and intermediate-term cycle low. Copyright 2018 by Tim Wood 7

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. Bottom line, the expectation continues to be that the advance out of the December 26th low is counter-trend and Equities are in a technical position in which the opportunity for the trading cycle top is at hand. Once 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 be triggered, which will put the market in an increasingly risky position with regard to what should lead to the setup for the decline into the higher degree cycle lows. Until then, this advance will remain in force. Copyright 2018 by Tim Wood 8

7 Both the Intermediate Term Breadth Momentum Oscillator and the Intermediate Term Volume Momentum Oscillator remain above their trigger lines in association with the advance out of the trading cycle low. Copyright 2018 by Tim Wood 9

8 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 also remain positive in association with their upturns out of the trading cycle low. The Ratio Adjusted McClellan Oscillator remains below its trigger line, which makes it negative as we use it. The triggering of a short-term sell signal in conjunction with a down turn and crossing below the trigger line I have added should serve to confirm that the trading cycle top has been seen. Copyright 2018 by Tim Wood 10

9 Next is the Smoothed McClellan Oscillator, which remains flat. A cross below the trigger line in association with a short-term sell signal will be suggestive of the trading cycle top. Copyright 2018 by Tim Wood 11

10 Next is the Accumulation/Distribution Index, which turned marginally above its trigger line on Thursday. The divergence we are seeing is suggestive of the pending top, but we need to see another downturn and the triggering of a short-term sell signal in order to mark that top. Copyright 2018 by Tim Wood 12

11 Next is our weekly chart of the Industrials. The intermediate-term buy signal in association with the December 26th low remains intact and as a result, the dark blue scenario in conjunction with it having marked an intermediate degree low, rather than just a trading cycle degree low, has proven to be at play. It is because of the cyclical phasing of the higher degree seasonal cycle low that the December low should not have marked a seasonal cycle low. Based on that phasing and the left-translated structure associated with the current seasonal cycle in the Industrials, lower prices into the higher degree seasonal cycle are therefore expected. Also, knowing the statistical expectations associated with the seasonal cycle, per the January research letter, the expectation is for this seasonal cycle low to coincide with the higher degree 4-year cycle low. With the timing band for the next intermediate-term cycle low running between April 19th and June 21st, the expectation is for the higher degree clustering of lows to occur in this timeframe in conjunction with the next intermediateterm cycle low. The alternative would be that the December low marked this higher degree clustering of lows. I was asked about this and I ve learned to never say never, but that would certainly be an oddity and I just don t think that is what has occurred here. I think this is merely an intermediate-term advance that should set the market up for the decline into the higher degree cycle lows. Therefore, there have pretty much been no changes at this level as we await the conclusion of this counter-trend advance to run its course. In summary, we remain in a holding pattern and the story remains the same. As I have said all along, short of another market miracle, the advance out of the December low should be counter-trend and the higher degree intermediate-term, seasonal and 4-year cycle low should still lie ahead. The opportunity to cap this intermediate-term advance will come with the triggering of a short-term sell signal, but until then, higher prices will remain possible. At the same time, because of the evidence with regard to the clustering of higher degree cycle lows still lying ahead, the market is in a risky technical position. Reason being, as I showed you with Amdocs, we are positioned for a potential break without warning. Copyright 2018 by Tim Wood 13

12 Gold End of Week Intermediate-Term Indicator Summary Intermediate-Term Neutral Daily Indicator Summary Short-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 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 timing band for the trading cycle low runs between January 11th and January 25th. We knew that the decline into this low has been underway and that based on the timing band it was due, but that the oscillator picture was not quite ripe. However, I also explained that the completion of a daily swing low was key with regard to this low and on Friday a daily swing low was definitely completed. As a result, we have a fresh trading cycle low and Gold is again positioned to move higher out of this trading cycle low. That said, the intermediate-term cycle top is also due. This last trading cycle top was an opportunity to cap the intermediate-term cycle top, but with Friday s reversal a weekly swing low was not completed, so that did not happen. It will now be the current trading cycle advance that will have the opportunity to cap this intermediate-term cycle top and the first evidence of that will come if we see this trading cycle peak with a left-translated structure. For now, this short-term buy signal will continue to hold in association with this trading cycle advance until a daily swing high and downturn of the daily CTI is seen.. Copyright 2018 by Tim Wood 14

13 Our daily chart of the XAU is next. The price action on Wednesday marginally completed the formation of a daily swing low, which was accompanied by a marginal upturn of the daily CTI. As a result, a marginal short-term buy signal was triggered. Thursday was an inside down day, which made Wednesday s shortterm buy signal all the more questionable. As reported on Thursday night, in order to confirm this shortterm buy signal we needed to see a close above Wednesday s high. The big move on Friday filled that bill and in doing so the trading cycle low has been confirmed. As with Gold, the intermediate-term cycle top is also due and because of the intermediate-term sell signal, it may possibly be in place on the XAU. In turn, this trading cycle advance should be a retest of the intermediate-term cycle top or a final probe up into that top. As with Gold, for now, this short-term buy signal in association with the new trading cycle low will stand until another daily swing high and downturn of the daily CTI is seen. Copyright 2018 by Tim Wood 15

14 Next is our weekly chart of Gold. The timing band for the intermediate-term cycle low ran between December 7th and January 25th and as explained here last week, it has been looking as if the November 11th weekly swing low marked an early intermediate-term cycle low. Now that Gold has moved through this timing band, along with the accompanying oscillator picture, we have to assume that as having been the case and that the timing band for the intermediate-term cycle low runs between March 8th and April 26th. We had an intermediate-term sell signal in the making most of the week, but with Friday s reversal higher it did not materialize. Therefore, the previously triggered intermediate-term buy signal remains intact. However, the price/oscillator picture also continues to be indicative of the intermediate-term cycle top. Once a weekly swing high and downturn of the weekly CTI, plotted with price, is seen this top should be in place. A lefttranslated trading cycle advance will also be suggestive of the intermediate-term cycle top. For now, this intermediate-term buy signal remains force. A weekly swing high will be completed in the coming week if 1, is not bettered and if 1, is violated. Copyright 2018 by Tim Wood 16

15 The weekly chart of the XAU is next and here too, the oscillator picture continues to be suggestive of the intermediate-term cycle top. In the case of the XAU, a weekly swing high and downturn of the CTI occurred the week of January 18th. As a result, every indication is that we should have the intermediate-term cycle top in place and the expectation continues to be that the XAU is leading Gold. But, as I have said here all along, we need to see a weekly swing high and downturn of the weekly CTI in BOTH, Gold AND the XAU as evidence that the intermediate-term cycle tops have been seen. As I also explained here last weekend, further confirmation of the intermediate-term cycle top will come if the advance out of this trading cycle low is a left-translated failure and that opportunity is now at hand. Any further strength in conjunction with the next trading cycle advance should be a final push up into the intermediate-term cycle top. Bottom line, the test of the intermediate-term cycle top is at hand with this trading cycle advance and for now, this intermediate-term sell signal still stands and the price/oscillator picture is positioned for lower prices into the intermediate-term cycle low. Copyright 2018 by Tim Wood 17

16 Dollar End of Week Intermediate-Term Indicator Summary Intermediate-Term Neutral/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 The trading cycle low was seen on January 9th and the timing band for the next trading cycle low runs between February 4th and February 18th. I have explained that the current trading cycle is the test as to whether we have also seen the intermediate-term cycle low, or if that low still lies ahead with with one more trading cycle down. If this trading cycle advance peaks with a right-translated structure, then it should prove that the intermediate-term cycle low was seen on January 9th. But, in the event this trading cycle peaks with a left-translated structure, it will leave the Dollar set up for another trading cycle down into the intermediate-term cycle low. With the price action on Friday completing the formation of a daily swing high, per the parameters given here in the Thursday night update, along with the downturn of the daily CTI, a short-term sell signal was triggered, the current setup now puts the Dollar at risk of a left-translated trading cycle top, which we must assume to be the case until proven otherwise. Any further weakness through next week will be further suggestive of this having been the case. In order to correct this seemingly left-translated structure, Thursday s swing high has to be bettered. Until then, the assumption is that we have a lefttranslated trading cycle top in place. A daily swing low will be completed on Monday if holds and if is bettered. Copyright 2018 by Tim Wood 18

17 Next is our weekly Dollar chart and the timing band for the intermediate-term cycle low runs between January 11th and March 1st. The week of January 18th price completed the formation of a weekly swing low, but I said here in the weekend update that followed I would ideally like to have seen another trading cycle down to carry price into the middle portion of the timing band for this low and which would pull the oscillators into oversold territory. This past week we saw an upturn of the weekly CTI, plotted with price, which triggered an intermediate-term buy signal, which would normally be further suggestive of the intermediate-term cycle low having been seen. But, as a result of the price reversal seen this past week and in light of a potentially left-translated trading cycle top, the Dollar is at risk of an additional trading cycle down into the intermediate-term cycle low. I suspect that this is what is happening and the price action this next week should be key in confirming whether this is the case, or of this is just a retest of the low. Bottom line, this low is due with either the current trading cycle low or the next and we remain in the process of determining which. Copyright 2018 by Tim Wood 19

18 Bonds End of Week Intermediate-Term 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 High Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Short Term Indicators Stochastic The timing band for the trading cycle low ran between January 4th and January 25th and this low was seen on January 18th. The price action on Friday completed the formation of a daily swing high, but with the daily CTI remaining positive, the short-term buy signal remains intact. In order to mend the potential of an intermediate-term cycle top, the advance out of this trading cycle low must unfold with a right-translated structure. As a result of Friday s completion of a daily swing high, this advance is now at risk of failing and in order to keep the advance intact, we need to see the completion of another daily swing low. A failed and/ or left-translated trading cycle advance will leave Bonds positioned for further weakness into the higher degree intermediate-term cycle low. Copyright 2018 by Tim Wood 20

19 Our weekly chart of Bonds is next. The timing band for the next intermediate-term cycle low runs between February 1st and April 19th. The price action the week of January 11th completed the formation of a weekly swing high that was suggestive of the intermediate-term cycle top. The intermediate-term sell signal was not triggered until the following week with the downturn of the weekly CTI. Therefore, the evidence continues to be suggestive of the intermediate-term cycle top. Further confirmation of this will come if the advance out of the current trading cycle low proves to be a left-translated failure, which it is now at risk of being. If this does prove to be the case, then it will serve as further confirmation of the intermediate-term cycle top and will leave Bonds positioned for lower prices into the intermediate-term cycle low. However, with this intermediate-term cycle advance being right-translated, it is suggestive of the October low having marked the higher degree cycle lows, as was discussed in the January research letter. For that reason, the decline into the intermediate-term cycle low should be counter-trend. For now, with regard to the intermediateterm cycle, the current trading cycle advance will serve to confirm weather we have in fact seen the intermediate-term cycle top, which based on the intermediate-term sell signal and cyclical phasing we have to continue to assume to be the case until Bonds can prove otherwise. Copyright 2018 by Tim Wood 21

20 Crude Oil Still, all of the price action since Tuesday s price reversal has occurred within Tuesday s price range and as a result, there have been no structural changes. Overall, the price/oscillator picture continues to be suggestive of a top, but we need to see the completion of a daily swing high and downturn of the daily CTI in order to trigger a short-term sell signal. Shorter-term, Crude Oil is again positioned for higher prices into the trading cycle top. If the decline out of the pending top then completes the formation of a weekly swing high that is confirmed by a downturn of the weekly CTI, the evidence will be suggestive of the anticipated counter-trend intermediate-term cycle top. A daily swing high will be completed on Monday if is not bettered and if is violated. Any additional push up from here should be associated with a final push into the trading cycle top. Copyright 2018 by Tim Wood 22

21 Next is our weekly chart. The advance out of the January 4th weekly swing low, in association with the intermediate-term cycle advance, remains intact and has carried price to overbought levels, per the stochastic. The pending trading cycle top, once in place, will be an opportunity to cap this intermediateterm/counter-trend top, but the key there will be a weekly swing high, followed by a left-translated trading cycle advance. A weekly swing high AND downturn of the weekly CTI will be the first step. If we don t see a weekly swing high in association with this trading cycle top, then higher prices should be expected following the decline into the trading cycle low. A weekly swing high will be completed in the coming week if is not bettered and if is violated Cycles News & Views; All Rights Reserved timwood1@cyclesman.com Copyright 2018 by Tim Wood 23