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

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1 Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on January 18, 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 Negative Low Positive Low XAU Negative High Negative High Dollar Positive Low Negative Low Bonds Negative High Negative High Crude Oil Positive Low Positive Low Unleaded Positive Low Positive Low Natural Gas Positive 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 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 20, 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 In light of the continued advance this past week, the weight of the evidence now favors the intermediate-term cycle low having occurred on December 26th rather than on October 29th. This in turn pushes the timing band for the next intermediate-term cycle low out by 8 weeks, which moves the timing band to between April 19th and June 21st. We know that the seasonal cycle low occurs in conjunction with an intermediate-term cycle low and with the December low occurring prior to the normal timing for the seasonal cycle low, regardless of the phasing of the intermediate-term cycle, the expectation was to see another intermediateterm cycle down into the seasonal cycle low. Therefore, the expectation has been and continues to be for the advance out of the December low to be counter-trend and for this reason nothing has changed other than the degree of the current advance and possibly the timeframe for the next intermediate-term cycle low in the event it should carry into the outer portion of the timing band. Let me add that with the intermediate-term cycle low having been seen in December rather than October, this cycle just concluded its 3rd week, so Copyright 2018 by Tim Wood 5

4 obviously we are early into this cycle. And, if the higher degree cycles do in fact still lie ahead, this intermediate-term cycle should ideally peak with a left-translated structure. The short and intermediate-term buy signals remain intact in Gold, but the evidence continues to be suggestive of the trading cycle top being in place. The January 10th short-term sell signal on the XAU remains intact and the price action this week also triggered an intermediate-term sell signal, which is suggestive of both the trading and the intermediate-term cycle top. If the decline into the trading cycle low in Gold completes the formation of weekly swing high, then we should prove to have the intermediate-term cycle top in both Gold and the XAU in place. Monday s short-term sell signal in Crude Oil was never confirmed and on Friday we saw the triggering of another short-term buy signal. A short-term buy signal was also re-triggered on the CRB Index, but as with Crude Oil, this should be an additional probe up into the trading cycle top. The short-term buy signal on the Dollar remains intact and until proven otherwise the assumption is that an early trading cycle low was seen. Bonds continue pressing into what should be their trading cycle low. Once a daily swing low and upturn of the daily CTI is seen, this low should be in place, but as a result of this week s triggering of an intermediate-term sell signal, Bonds are now at further risk of the intermediate-term cycle top. 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. 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 is now sitting just below the black MA line. Copyright 2018 by Tim Wood 6

5 The Trading Cycle Oscillator in the upper window has ticked back up. The Momentum indicator in the upper window remains above its zero line and the ongoing divergence that is forming is suggestive of the pending trading cycle top. The stochastic in the middle window has turned back up and remains at overbought levels. The first of our Primary Short-Term Indicators is the New High/New Low Differential, plotted with price, which has ticked marginally back up. The Trend Indicator remains positive in association with the trading 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. However, the buy signal in association with this advance will remain intact until another daily swing high AND downturn of ALL Three of the Primary Short-Term Indicators are seen. Once this occurs, the opportunity to cap the intermediate-term cycle advance will be at hand. 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 upturn out of the trading cycle low. The Ratio Adjusted McClellan Oscillator has turned back up above its trigger line. Upon the triggering of a short-term sell signal, along with a crossing below the trigger line, we should have the anticipated top in place. I covered the details surrounding the recent extreme readings on the Ratio Adjusted McClellan Oscillator in the January 8th short-term update, so please refer to the details there. Copyright 2018 by Tim Wood 10

9 Next is the Smoothed McClellan Oscillator, which also remains well above its trigger line in association with the upturn out of the December low. Copyright 2018 by Tim Wood 11

10 The Accumulation/Distribution Index turned down on Monday, but back up on Friday and we now have a divergence in the making. Copyright 2018 by Tim Wood 12

11 Next is our weekly chart of the Industrials. The price action the week of January 4th completed the formation of weekly swing low and the price action the week of January 11th turned the weekly CTI up, which triggered an intermediate-term buy signal. As discussed in the opening paragraph, in light of the price action this last week, the evidence does now favor the December low as having marked the intermediate-term cycle low. We have been watching the light blue verses the dark blue scenario on the weekly chart for some time now and this serves to confirm the dark blue. As a result, we know that this advance is of higher degree and that the timing band for the next intermediate-term cycle low runs between April 19th and June 21st. The expectation has been for this low to occur in the April timeframe, so from that perspective nothing has changed. But, this timing band does allow it to possibly carry out into June. As a result of the shift in the timing band, I have moved the red price target out accordingly. Given the statistics on the seasonal cycle and the 4-year cycle low lying ahead, the expectation has been and continues to be for this to be a counter-trend advance, which should set the market up for the decline into these higher degree lows. The pending trading cycle top will be an opportunity to cap this intermediate-term cycle advance and if the decline out of the pending trading cycle top completes the formation of a weekly swing high, which is confirmed by a downturn of the weekly CTI, then the evidence at that time will be suggestive of the intermediate-term cycle top. If not, there may be another trading cycle up to complete the setup. At this juncture, our focus is on the trading cycle top. More on all of this as it develops. For now, the intermediateterm buy signal stands. In summary, 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. Copyright 2018 by Tim Wood 13

12 Gold End of Week Intermediate-Term Indicator Summary Intermediate-Term Neutral Daily Indicator Summary Short-Term 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 Low Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Short Term Indicators Stochastic In spite of the weakness on Friday, all of the price action since January 4th has still occurred within the January 4th price range. For that reason, we have yet to see the completion of a daily swing high. However, the evidence continues to be suggestive of the January 4th high having marked the trading cycle top and with the timing band for the trading cycle low running between January 11th and January 25th and based on the price/oscillator picture, the assumption continues to be that the trading cycle top has been seen and that the decline into the low is underway. The oscillator picture is now indicative of further weakness into the trading cycle low this next week. 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. If we see the completion of a weekly swing high in association with the decline into the trading cycle low, then we should have the intermediate-term cycle top in place. Until then, higher prices in association with this higher degree cycle advance will remain possible. A daily swing high will be completed on Monday if 1, is not bettered and if 1, is violated. Copyright 2018 by Tim Wood 14

13 Our daily chart of the XAU is next. A short-term sell signal was triggered on January 10th and we knew that the oscillator picture was ripe for the trading cycle top. The continued weakness this past week has served to further confirm the suspected trading cycle top. The expectation has been for Gold to follow and while every indication is that it s also turning down out of its trading cycle top, we still need to see a sell signal in Gold as well. This trading cycle top is also an opportunity to cap the higher degree intermediateterm cycle advance and now with the completion of a weekly swing high and downturn of the weekly CTI on the XAU, an intermediate-term sell signal has been triggered and the price/oscillator picture is suggestive of the intermediate-term cycle top. That said, I want to see a joint intermediate-term sell signal in Gold and then a failed trading cycle advance as further confirmation. More on this as it develops. Copyright 2018 by Tim Wood 15

14 Next is our weekly chart of Gold. The intermediate-term buy signal remains intact, but the price/oscillator picture continues to be suggestive of the intermediate-term cycle top. We know that the August low marked an intermediate-term and higher degree seasonal cycle low and that the timing band for the next intermediate-term cycle low runs between December 7th and January 25th As discussed in last weekend s update, as far as we are into this timing band and based on the current price/oscillator picture, the intermediate-term cycle top should be at hand. Once a weekly swing high and downturn of the weekly CTI, plotted with price, is seen this top should be in place. Given that we are this far into the timing band, it is increasingly looking as if the November 11th weekly swing low marked an early intermediate-term cycle low. We will know more about this possible alternative phasing soon enough. In the meantime, regardless of the phasing of the last intermediate-term cycle low, the oscillator picture continues to be suggestive of the intermediate-term cycle top and the completion of a weekly swing high is key. 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 has been suggestive of the intermediate-term cycle top. Per the parameters given here in last weekend s update, the XAU completed the formation of a weekly swing high that was confirmed by a downturn of the weekly CTI, which triggered an intermediate-term sell signal. As a result, every indication is that we should have the intermediate-term cycle top in place. The expectation also is that the XAU is leading Gold. Once weekly swing highs in both Gold AND the XAU are seen, the intermediate-term cycle tops should be in place and the opportunity to cap the counter-trend advance will be at hand. Further confirmation of the intermediate-term cycle top will come if the advance out of the next trading cycle low is a left-translated failure. To the contrary, any further strength in conjunction with the next trading cycle advance should be a final push up into the intermediateterm cycle top. For now, this intermediate-term sell signal will stand 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/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 and Tuesday s short-term buy signal remains intact. As a result, we will continue to operate under the assumption that the trading cycle low was seen a few days early until proven otherwise. The completion of a weekly swing low this past week is also evidence of an early trading cycle low and any further strength that turns the weekly CTI up will serve as further evidence to that effect. If the Dollar holds above the January 9th daily swing low as we move through the remainder of this timing band it will serve to confirm that an early trading cycle low was in fact seen. In the event this trading cycle peaks with a left-translated structure, then it will leave the Dollar set up for another trading cycle down into the intermediate-term cycle low. Therefore, this next week will be key for the Dollar with respect to the confirmation of the trading and intermediate-term cycle low. Bottom line, the shortterm buy signal will stand until another daily swing high and downturn of the daily CTI is seen and the assumption is that the trading cycle low is in place. A daily swing high will be completed on Monday if is not bettered and if is violated. 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. Ideally, I would like to have seen another trading cycle down to carry price into the middle portion of the timing band for this low and which pulled the oscillators into oversold territory. However, per the parameters given here in last weekend s update, we saw the completion of a weekly swing low this past week, so it is now possible this low has been seen. Any further strength that turns the weekly CTI, plotted with price, up will trigger an intermediate-term buy signal, which will be further suggestive of this low having been seen. Then, if the advance out of the trading cycle low unfolds with a right-translated structure, every indication will be that the low has been seen. In the event this trading cycle advance peaks with a left-translated structure, then we should see one more trading cycle down into the intermediate-term cycle low. Bottom line, this low is due with either the current trading cycle low or the next and we are currently in the process of confirming whether it is the current. More on this as it develops. 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 Sell 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. We knew that it was possible this low was seen on January 10th, but we needed to see a short-term buy signal in order to confirm it and that did not occur. In spite of this possibility, I also reported at the time that I ideally wanted to see one more push below the January 10th low, which we continue to see. As a result, we now have oscillator divergences in the making and a much more mature price/oscillator picture. Once a daily swing low is formed and confirmed by an upturn of the daily CTI, the trading cycle low should be in place. The alternative is that the January 10th swing low marked the trading cycle low and we have a failed and lefttranslated trading cycle at play. I don t think this is the case, but if a swing low is not seen between now and January 25th, then that may prove to be the case. 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. As reported here last weekend, 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. However, an intermediate-term sell signal was not triggered, but with the additional weakness this past week turning the weekly CTI down, it was. Therefore, every indication is that the intermediate-term cycle top has been seen. Confirmation of this will come if the advance out of the current/pending trading cycle low proves to be a left-translated failure, which if it does, will then 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. More on all of this as it develops. For now, with regard to the intermediate-term cycle, the pending trading cycle advance will serve to confirm wether we have in fact seen the intermediate-term cycle top, which based on the intermediate-term sell signal and cyclical phasing we will assume to be the case until Bonds can prove otherwise. Copyright 2018 by Tim Wood 21

20 Crude Oil The price action on Monday completed the formation of a daily swing high that was confirmed by a downturn of the daily CTI. But, as a result of Tuesday s completion of a daily swing low, I said that we needed to see Monday s sell signal re-confirmed with a close below Monday s daily swing low. That never occurred and on Friday another daily swing low and upturn of the daily CTI was seen. As a result, another short-term buy signal was triggered. As with Equities, this additional strength should be within the context of the counter-trend advance. Once another daily swing high and downturn of the daily CTI is seen, the opportunity to cap this advance will again be at hand. A daily swing high will be completed on Monday if is not bettered and if is violated. 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. The pending trading cycle top, once in place, will be an opportunity for the intermediate-term/counter-trend top. If a weekly swing high AND downturn of the weekly CTI is seen in association with the decline out of the pending trading cycle top, then we should prove to also have this intermediate-term cycle top in place as well. If not, 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