Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on November 23, 2018 Market Daily CTI Daily Swing Weekly CTI Weekly Swing Industrial Negative High Negative High Transports Negative Low Neutral High NDX Negative High Negative High S&P Inverse Fund Positive N/A * Positive Low CRB Index Negative High Negative High Gold Positive Low Positive Low XAU Positive High Positive Low Dollar Positive Low Negative High Bonds Positive Low Positive Low Crude Oil Negative High Negative High Unleaded Negative 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
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
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 5 3 3 Stochastic Cycle Momentum Indicator *When this indictor is it is negative for the market and visa versa. November 25, 2018 Daily Indicator Summary Short-Term Sell Primary Indicators Formation of a Daily Swing High 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 5 3 3 Stochastic Cycle Momentum Indicator Trading Cycle Oscillator Momentum Indicator Ratio Adjusted McClellan Oscillator Crossover Accumulation/Distribution Index Both the short and intermediate-term sell signals in Equities remain intact. The Industrials, S&P and most other indexes and averages are now approaching their October lows, while the NDX, the AMEX and to a lesser degree the DAX have undercut their October lows. Structurally, we know that the October lows marked the most recent trading cycle low and as a result of the violation of that low on the NDX, the AMEX and the DAX, we should have the suspected failed and left-translated trading cycles firmly in place. Some of the short-term oscillators are now suggestive of a bounce, but in light of the structural developments on the NDX, the AMEX and the DAX, any such bounce from current levels should be counter-trend and lower prices into the next trading cycle low should ideally follow. Again, the Industrials and the S&P 500 have been the hold out, which has continued to provide cover for the higher degree setup that has been slowly taking form. The Leading Economic Turn Indicator has now moved to its lowest level in 14 months and the growth rate has moved to the lowest level since March 2016. In light of the cyclical evidence at hand, the 4- year cycle top in Equities should be in place. This remains an extremely important and risky juncture. Copyright 2018 by Tim Wood 5
No change with Gold in that the short-term buy signal remains intact, but the counter-trend top should be close at hand. On the XAU, we saw another push up on Wednesday, but then price completed the formation of an other daily swing high on Friday. Once swing highs are in place and confirmed by downturns of the daily CTI on both Gold and the XAU, short-term sell signals will be re-triggered and the counter-trend top should be in place. The short and intermediate term sell signals in Crude Oil remain intact and the continued weakness is reflective of the decline out of the higher degree seasonal and 3-year cycle tops and into theses higher degree cycle lows. The short-term counter-trend bounce in the CRB Index failed last week and the CRB Index is now sitting at 14 month lows in association with the decline into the seasonal and 3- year cycle low. The Dollar reversed off of its lows on Tuesday, which we suspected marked the trading cycle low and on Friday another short-term buy signal was triggered. Therefore, the assumption continues to be that the trading cycle low has been seen. At a higher degree, the intermediate-term cycle top is due, but we must see a failed and/or left-translated trading cycle advance as evidence of that top. The short-term buy signal in Bonds remains intact as does the higher degree intermediate-term advance. Once a daily swing high and short-term sell signal is triggered, the trading cycle top should be in place. Copyright 2018 by Tim Wood 6
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, which is suggestive of a potential bounce from current levels. Also, the crossing of the green MA line, above the black MA line, continues to be suggestive of the October low having marked the intermediate-term cycle low. Copyright 2018 by Tim Wood 7
The Trading Cycle Oscillator in the upper window remains negative. The Momentum indicator in the upper window remains below its trigger line. The 5 3 3 stochastic in the middle window has again moved to oversold levels, which is also suggestive of a possible short-term bounce. The first of our Primary Short- Term Indicators is the New High/New Low Differential, plotted with price, which turned back down on Friday. The Trend Indicator continues to weaken after crossing back below its trigger line. Copyright 2018 by Tim Wood 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 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
Both the Intermediate Term Breadth Momentum Oscillator and the Intermediate Term Volume Momentum Oscillator remain in gear to the downside. Copyright 2018 by Tim Wood 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 in gear to the downside. The Ratio Adjusted McClellan Oscillator remains below the zero line as well as the trigger line I have added and on Friday it ticked marginally back down. While some of the other short-term indicators are suggestive of a possible short-term bounce, the overall price/oscillator picture here continues to warn of a failed and left-translated trading and intermediate-term cycle top. Given the current cyclical phasing, the downturn of this indicator, in this position, has the potential to be rather bearish. Copyright 2018 by Tim Wood 11
Next is the Smoothed McClellan Oscillator, which has crossed back below its trigger line. Copyright 2018 by Tim Wood 12
The Accumulation/Distribution Index is once again sitting above its trigger line, which here too, is suggestive of a potential bounce. Copyright 2018 by Tim Wood 13
Our weekly chart of the Industrials is next. The intermediate-term sell signal remains intact and the timing band for the intermediate-term cycle low runs between October 17th and December 19th. I discussed this in the update last weekend, but we are still within this timing band and one of two things is going on. Either we are seeing another push down into the intermediate-term cycle low, or because of the weekly swing high and intermediate-term sell signal, the intermediate-term advance is already failing. Until we get through the remainder of the timing band for this low we are not going to know for sure, but based on the November 9th weekly swing high, the price/oscillator picture suggests that the intermediate-term cycle low was seen on October 29th and that we have a left-translated intermediate-term cycle at play. Any bounce from here and into early December will be further suggestive of the intermediate-term cycle low having occurred in October. In the event we are seeing an additional push down into the intermediate-term cycle low now and that the intermediate-term cycle low is seen in conjunction with the next trading cycle low, simply shifts the timing of the intermediate-term cycle low from the October 29th trading cycle low to the next trading cycle low. It dose not negate the overall setup that has been and continues slowly falling into place. More on this all once we get into the next trading cycle low. Cyclical phasing aside, the bottom line at this level is that the intermediate-term sell signal remains intact and will until a weekly swing low and upturn of the weekly CTI is seen. Copyright 2018 by Tim Wood 14
Below is a longer-term weekly chart of the Oil Service Index vs the Industrials. As I have explained here before, while the magnitude of the cycles are not the same, the cyclical rhythm is historically very similar. I have also explained here that as both the OSX and Industrials moved up out of their 2015/16 4-year cycle low, the last joint high was seen in December 2016. Since that time, the longest non-confirmation on record has taken shape. In spite of the fact that this non-confirmation is the longest on record, given the known similar cyclical structure, I have explained that it has been a warning of an ending move in conjunction with the higher degree setup. I now warn that we are nearing the point in which the Industrial play catch up. In Summary, we have both short and intermediate-term sell signals in place and Equities remain at risk of both failed and left-translated trading and intermediate-term cycle tops. Further structural confirmation of these potential failures is still required, but based on the current price/oscillator picture we must continue to assume that this is the case until structural evidence proves otherwise. Bigger picture, per the list in the November research letter, the 4-year cycle top should be in place. The Industrials and the S&P are expected to follow and the 4-year cycle top should also ideally be in place there as well, but as I have said all along, they have been providing cover for the higher degree setup, which in their case is not yet complete. Copyright 2018 by Tim Wood 15
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 5 3 3 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 5 3 3 Stochastic The cyclical phasing suggests that the October 31st daily swing low marked the trading cycle low and with the violation of that low on November 9th, every indication is that we have a failed and left-translated trading cycle at play. As a result, the advance out of the November 13th daily swing low is expected to be counter-trend, which should in turn be followed by lower prices into the next trading cycle low. The oscillator picture is now ripe for a top and once a daily swing high and downturn of the daily CTI is seen, a short-term sell signal will be re-triggered and the decline into the trading cycle low should resume. The timing band for the next trading cycle low runs between November 26th and December 10th and a daily swing high will be completed on Monday if 1,230.90 is not bettered and if 1,220.10 is violated. Copyright 2018 by Tim Wood 16
Our daily chart of the XAU is next. Here too, we saw the violation of the October 31st trading cycle low in conjunction with the decline into the November 13th daily swing low. Consequently, as with Gold, the expectation has been for the advance out of the November 13th high to be counter-trend. On Tuesday the XAU completed the formation of a daily swing high that was confirmed by a downturn of the daily CTI, which triggered a short-term sell signal. But, on Wednesday another daily swing low and upturn of the daily CTI was seen, which in turn re-triggered another short-term buy signal. On Friday another daily swing high was completed and any further decline that turns the daily CTI back down will re-trigger another short-term sell signal, which should in turn cap this counter-trend advance. This is also indicative of the counter-trend top in Gold and once daily swing highs and short-term sell signals are triggered on both Gold and the XAU, the counter-trend tops should be confirmed. Copyright 2018 by Tim Wood 17
Next is our weekly chart of Gold. 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 every indication continues to be that the intermediate-term cycle top is in place. The price action this past week completed the formation of a marginal weekly swing low, which was also accompanied by a marginal upturn of the weekly CTI, plotted with price. As a result, a marginal intermediate-term buy signal was triggered, but it should be in association with the short-term counter-trend advance. Also, based on the overall oscillator picture at this level, this should ideally be a counter-trend advance. For these reasons I question this buy signal. The timing band for the next intermediate-term cycle low runs between December 7th and January 25th. Any further advance at this point should still be counter-trend and followed by further weakness into the intermediate-term and seasonal cycle low. A weekly swing high will be completed in the coming week if 1,230.90 is not bettered and if 1,218.50 is violated. Based on the overall cyclical phasing, once another weekly swing high and downturn of the weekly CTI is seen, another intermediate-term sell signal will be triggered and the decline into the intermediate-term and seasonal cycle low should resume. Copyright 2018 by Tim Wood 18
Dollar End of Week Intermediate-Term Indicator Summary Intermediate-Term Sell/Neutral Primary Indicators Formation of a Weekly Swing High Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Indicators 5 3 3 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 5 3 3 Stochastic The timing band for the trading cycle low ran between November 9th and November 23rd. The assumption has been that the trading cycle top was seen on November 12th. As reported here Tuesday night, because of the price reversal seen on Tuesday, the evidence suggested that this low had probably been seen, but we needed to see the completion of a daily swing low and upturn of the daily CTI in order for a short-term buy signal to be triggered. This occurred on Friday and as a result every indication is that we have the trading cycle low in place. The alternative phasing continues to be that the November 7th daily swing low marked a slightly early trading cycle low. I can t totally eliminate this possibility yet, but it is becoming increasingly less likely. Regardless of the phasing of this cycle, bottom line is that this shortterm buy signal will remain intact until another daily swing high and downturn of the daily CTI is seen. A daily swing high will be completed on Monday if 96.86 is not bettered and if 96.29 is violated. Copyright 2018 by Tim Wood 19
Next is our weekly chart of the Dollar and the timing band for the pending intermediate-term cycle low runs between November 2nd and December 21st. The price action this past week completed the formation of a weekly swing high that was confirmed by a downturn of the weekly CTI, plotted with price, which triggered an intermediate-term sell signal. As a result, we should have the intermediate-term cycle top in place, but in light of the reversal off of the lows this last week I am not convinced of the intermediate-term sell signal. In order to confirm this sell signal I want to see a close back below this past week s low and any further advance from here should be an ending move into the intermediate-term cycle top. More on this cyclical phasing as it develops. At a higher level, I again remind you that with the higher degree 4-year cycle low in place and based on the structure of this seasonal cycle advance, the decline out of the pending intermediate-term cycle top should be counter-trend and should ultimately be followed by further strength. Copyright 2018 by Tim Wood 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 5 3 3 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 5 3 3 Stochastic The short-term buy signal and advance out of the November 7th trading cycle low remains intact. The timing band for the next trading cycle low runs between November 29th and December 20th. The price/ oscillator picture is now suggestive of the trading cycle top and once a daily swing high and downturn of the daily CTI is seen, the trading cycle top should be in place. With the October 29th trading cycle top having been bettered, the decline into the pending trading cycle low should hold above the previous trading cycle low and in light of the higher degree intermediate-term cycle low having occurred on October 9th, higher prices should follow into the next trading cycle top. To see anything to the contrary would be indicative of the intermediateterm cycle tops. For now, this short-term buy signal stands and ideally I would still like to see another couple of days up before this trading cycle peaks. Copyright 2018 by Tim Wood 21
Next is our weekly chart of Bonds and the timing band for the intermediate-term cycle low ran between August 31st and November 23rd. We have known that the October 9th low likely marked the intermediateterm cycle low. We have been operating under the assumption that this was the case and as we moved through the timing band for this low the evidence continued to confirm that this was in fact the case. Because of the evidence with regard to the higher degree failed and left-translated seasonal and 3-year cycle top, the expectation is for this intermediate-term cycle advance 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 will also be indicative of an intermediate-term cycle top. For now, we still have both short and intermediate-term buy signals in place, but should be at or nearing the trading cycle top. Stay tuned! Copyright 2018 by Tim Wood 22
Crude Oil No change with Crude Oil. The October 4th short-term sell signal remains intact as does the intermediateterm sell signal that followed. At a higher level, this continued weakness is a result of the higher degree seasonal and 3-year cycle tops. Bottom line, until a daily swing low is formed and confirmed by an upturn of the daily CTI, this short-term sell signal will remain intact. However, as a result of the higher degree cycle tops, any bounce should be counter-trend. Copyright 2018 by Tim Wood 23
Next is our weekly chart of Crude Oil, which is now sitting at 16 month lows. The 23.6% retracement line, which is measured from the 2008 high and the 2016 low, was violated this past week and in the process Crude Oil has moved to oversold levels, per the 5 3 3 stochastic, which makes conditions ripe for a bounce at this level. We know that the higher degree seasonal and 3-year cycle top is in place and we also know that big declines tend to occur from oversold levels, as was seen in 2008 and 2014. Therefore, until a weekly swing low is formed and confirmed by an upturn of the weekly CTI, this intermediate-term sell signal will remain intact and lower prices will remain possible. 2018 Cycles News & Views; All Rights Reserved timwood1@cyclesman.com Copyright 2018 by Tim Wood 24
Copyright 2018 by Tim Wood 25