Cycle Turn Indicator Direction and Swing Summary. of Select Markets as of the close on. January 24, Daily CTI. Swing

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1 Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on January 24, 2019 Market Daily CTI Daily Swing Weekly CTI Weekly Swing Industrial Neutral Low Positive Low Transports Neutral Low Positive Low NDX Neutral High Positive Low S&P Inverse Fund Negative N/A * Negative High CRB Index Negative High Positive Low Gold Negative High Negative High XAU Positive Low Negative High Dollar Positive Low Positive Low Bonds Positive Low Negative High Crude Oil Negative Low Positive Low Unleaded Negative High Positive Low Natural Gas Negative High 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 24, 2019 Daily Indicator Summary Short-Term Neutral Primary Indicators Formation of a Daily Swing Low Cycle Turn Indicator (CTI) Slow Cycle Turn Indicator (CTI) New High/New Low Differential Confirming Indicators Trend Indicator (TI) McClellan Intermediate Term Breadth Momentum Oscillator (ITBM) McClellan Intermediate Term Volume Momentum Oscillator (ITVM) McClellan Summation Index McClellan Volume Summation Index Secondary Short Term Indicators Stochastic Cycle Momentum Indicator Trading Cycle Oscillator Momentum Indicator Ratio Adjusted McClellan Oscillator Crossover Accumulation/Distribution Index The Industrials completed the formation of a daily swing high on Tuesday. On Wednesday a daily swing low was completed and Thursday was an inside day. This continues to be a technical opportunity to cap this trading cycle advance, but we have yet to see the triggering of a short-term sell signal. Once a daily swing high and downturn of the Primary Short-Term Indicators is seen, this top should be in place. Then, once this trading cycle top is established, if we see the completion of a weekly swing high follow, the evidence at that time will also be suggestive of the intermediate-term cycle top. At a higher level, the expectation continues to be that the advance out of the December low is a counter-trend intermediate-term affair and that the higher degree nesting of lows still lies ahead. For now, while at a technical juncture for a turn, this advance remains intact. That said, as a result of the evidence with regard to the higher degree nesting of lows, the market is at a critical and risky juncture. More on all of this as the short-term sell signal develops. Copyright 2018 by Tim Wood 5

4 The short-term sell signal in Gold in association with the trading cycle top remains intact and if nothing changes on Friday, an intermediate-term sell signal will be triggered. We have a questionable short-term buy signal on the XAU and the intermediate-term sell signal remains intact. Short-term, both Gold and the XAU should be nearing their trading cycle lows. Crude Oil continues to be ripe for its trading cycle top and any further weakness from here that triggers a short-term sell signal should serve to confirm the trading cycle top, which will then be an opportunity to cap the intermediate-term cycle top as well. The short-term sell signal in Gasoline remains intact and the expectation is for Crude Oil to follow. The short-term sell signal on the CRB Index remains intact, but so far it has yielded little result. This is an opportunity to also cap the intermediate-term advance in the CRB, which upon the completion of a weekly swing high, should be in place. The Dollar continues pressing higher out of its early trading cycle low and the test now is whether we have also seen the intermediate-term cycle low. The structure of this trading cycle should tell the tale. With Bonds, we knew that the price/oscillator picture was extremely ripe for the trading cycle low and now that a short-term buy signal has been triggered, the suspected trading cycle low has proven to be in place. Moving back to Equities, when I say the market is at risk I want to show you what I mean. Below is a daily chart of the S&P, with Amdocs, which is a telecommunications billing company, in the lower window. While the degree of the advances and declines have varied, the overall cyclical pattern is the same. For example, note that both made February lows in In the case of Amdocs, it lead structurally in that it set up with left-translated cycles ahead of the S&P. While a few weeks apart, both made lows in October, rallied into November and then moved lower into the December intermediate-term cycle lows. It is the evidence with regard to the higher degree seasonal and 4-year cycle lows, still lying ahead, that makes this such a risky juncture. Consequently, just as Amdocs gapped below its December low, the rest of the market faces that same sort of risk. Copyright 2018 by Tim Wood 6

5 In the next chart below is a longer-term weekly chart of the S&P and Amdocs, which I am including to show you that the longer-term cyclical rhythm has also been the same. Amdocs is among the leaders with regard to this top and the decline into the higher degree cycle lows. Again, the risk is high and I have been saying that because of the structure. Hope this helped. Copyright 2018 by Tim Wood 7

6 Below is our distribution indicator and there have been no new developments here. The red intermediateterm Advancing issues line is tied to the intermediate-term cycle, which after violating its October low, bettered its December high and which is now turning back down. 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. 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 8

7 The Trading Cycle Oscillator in the upper window as turned 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 also continues to weaken. The first of our Primary Short-Term Indicators is the New High/New Low Differential, plotted with price, which remains flat, but 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 9

8 The Three Primary Short-Term Indicators are the Original and the Slow Cycle Turn Indicators, both plotted below, and the NYSE New High/New Low Differential, plotted with price above. Bottom line, 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. Copyright 2018 by Tim Wood 10

9 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 11

10 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 upturn out of the trading cycle low. The Ratio Adjusted McClellan Oscillator remains below its trigger line. The triggering of a short-term sell signal should serve to confirm that the trading cycle top has been seen. Copyright 2018 by Tim Wood 12

11 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 13

12 The Accumulation/Distribution Index is next and it has turned marginally back up above its trigger line, but its overall behavior is suggestive of the trading cycle top. In summary, we remain in a holding pattern and the story remains the same. Short of another market miracle the advance out of the December low should be counter-trend and the higher degree intermediateterm, 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, in which the current price/oscillator picture continues to be ripe for. As a result, the market is in a risky position. Copyright 2018 by Tim Wood 14

13 Gold End of Week Intermediate-Term Indicator Summary Intermediate-Term Neutral Daily Indicator Summary Short-Term Sell/Neutral 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 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 runs between January 11th and January 25th. There have been no changes in that the trading cycle top was seen on January 4th and that the decline into the low is underway. With price approaching the outer portion of the timing band, this low should be near. But, looking at the oscillator picture, this decline appears to have have further room to the downside in that we should ideally see the stochastic drawn down to oversold levels. That said, once a daily swing low is formed and confirmed by an upturn of the daily CTI, the trading cycle low should be in place. This trading cycle top is an opportunity to cap the intermediate-term and what should be a counter-trend advance out of the August low. Unless something change, we should have an intermediate-term sell signal on Friday, which will be further suggestive of the intermediate-term cycle top. A daily swing low will be completed on Friday if 1, holds and if 1, is bettered. Copyright 2018 by Tim Wood 15

14 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 makes Wednesday s shortterm buy signal all the more questionable. In order to confirm this short-term buy signal we need to see a close above Wednesday s high. Upon such development, we should have confirmation of the trading cycle low. To the contrary, any further weakness below Tuesday s low will be in association with an additional probe into the trading cycle low. The intermediate-term sell signal remains intact and as a result the evidence is suggestive of the higher degree intermediate-term cycle top. As further evidence of the higher degree cycle top we next need to see a joint intermediate-term sell signal in Gold and then a failed trading cycle advance in both Gold and the XAU. More on that as the advance out of the trading cycle low takes hold. A daily swing high will be completed on Friday if is not bettered and if is violated. Copyright 2018 by Tim Wood 16

15 Dollar End of Week Intermediate-Term Indicator Summary Intermediate-Term Neutral/Sell 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 timing band for the trading cycle low runs between January 14th and January 25th. The evidence has been suggestive of the January 9th low having marked an early trading cycle low and now that we have moved through the timing band, this has in fact proven to have been the case. A short-term sell signal was triggered on Wednesday, but it was reversed on Thursday. Now, the test is whether we have also seen the intermediate-term cycle low. 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. Unless something changes on Friday, we should see the triggering of an intermediate-term buy signal, which will be suggestive of the intermediate-term cycle low. For now, the short-term buy signal will stand until another daily swing high and downturn of the daily CTI is seen. A daily swing high will be completed on Friday if is not bettered and if is violated. Copyright 2018 by Tim Wood 17

16 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 Low Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Short Term Indicators Stochastic The timing band for the now due trading cycle low runs between January 4th and January 25th. I reported here Tuesday night that the price/oscillator picture was perfectly positioned for the trading cycle low and that as a result of the completion of a daily swing low on Tuesday, it should be in place. Wednesday was an inside day, but the additional strength on Thursday turned the daily CTI up, which triggered a short-term buy signal confirming the trading cycle low. Now, 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. 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 18

17 Crude Oil Since Tuesday s price reversal, all of the price action has occurred within Tuesday s price range. As a result, there have been no structural changes. 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. If the decline out of this 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 countertrend intermediate-term cycle top. A daily swing high will be completed on Friday if is not bettered and if is violated Cycles News & Views; All Rights Reserved timwood1@cyclesman.com Copyright 2018 by Tim Wood 19