Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on December 4, 2018 Market Daily CTI Daily Swing Weekly CTI Weekly Swing Industrial Neutral High Positive Low Transports Negative High Positive Low NDX Neutral High Positive Low S&P Inverse Fund Positive N/A * Negative High CRB Index Positive Low Positive Low Gold Positive Low Positive Low XAU Positive Low Positive Low Dollar Negative High Negative High Bonds Positive Low Positive Low Crude Oil Positive Low Positive Low Unleaded Positive Low Positive Low Natural Gas Negative Low Negative 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 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 Negative 5 3 3 Stochastic Cycle Momentum Indicator *When this indictor is it is negative for the market and visa versa. December 4, 2018 Daily Indicator Summary Short-Term Neutral 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 The advance out of the November 23rd half-trading cycle low had carried price to overbought levels and with the timing band for the next trading cycle low approaching, per the weekend update, we knew that the advance should be nearing its peak. I have further explained that with the decline into the recent halftrading cycle lows carrying the AMEX, the NDX, the CAC and the DAX below their October trading cycle lows, the advance out of the recent half-trading cycle low should be counter-trend and should be followed by even greater weakness. On Tuesday we saw the completion of a daily swing high and as a result, the countertrend advance should have run its course. However, with one of the Primary Short-Term Indicators still positive, we are having to see increasingly broader swings in order to trigger the signals. Any further weakness that put ALL Three of the Primary Short-Term Indicators into gear to the downside will trigger another short-term sell signal, which should serve to confirm the suspected counter-trend top. If this does in fact prove to be the case, which every indication at this point is that it should, then the failed and lefttranslated trading cycle top is in place and short of a market miracle or timely news events to stem the Copyright 2018 by Tim Wood 5
decline, normal cyclical behavior is suggestive of a violation of the October low as we press down into the next trading cycle low. More on this all as it progresses. For now, the ongoing risks of left-translated trading and intermediate-term cycles remains high! The short-term buy signal in Gold remains intact and the XAU also re-triggered another short-term buy signal. Once daily swing highs and short-term sell signals are seen on both Gold and the XAU, this countertrend advance should have finally run its course. Crude Oil finally got a toe hold on the bounce that has been trying to take hold and while this buy signal will remain intact, it also should prove to be counter-trend. The short-term buy signal on the CRB Index also remains intact, but the bounce there is also expected to be counter-trend. The Dollar has re-triggered yet another short-term sell signal and is at risk of greater weakness in association with the now due intermediate-term cycle top, but because of the reversal off of the lows on Tuesday we must see a close below Tuesday s low in order to confirm the sell signal. The short and intermediate-term buy signals on Bonds remains intact. 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 begun turning back down. The crossing of the green MA line, above the black MA line, is suggestive of the October low having marked the intermediate-term cycle low and a turn back down will be suggestive of the intermediate-term cycle top, as will a crossing of the red line below the two MA lines. Copyright 2018 by Tim Wood 7
The Trading Cycle Oscillator in the upper window has turned ever so slightly negative. The Momentum indicator has also turned down, but remains above its zero line. The 5 3 3 stochastic in the middle window has turned down from overbought levels, which is suggestive of the anticipated counter-trend top. The first of our Primary Short-Term Indicators is the New High/New Low Differential, plotted with price, which continues to weaken. The Trend Indicator remains above its trigger line in association with the advance out of the half-trading cycle low. A downturn will obviously be further suggestive of the counter-trend top. 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. A daily swing high was solidly completed on Tuesday and the counter-trend advance out of the half-trading cycle top should be in place. But, because the Slow Cycle Turn Indicator remains positive, a short-term sell signal has not yet been triggered. Again, the reason for this is that the increased volatility with the broad daily swings is requiring larger and larger swings in order to trigger the signals. That aside, the assumption has been and continues to be that we have a left-translated trading and intermediate-term cycle top in place and as a result, the risk at this juncture remains high. Copyright 2018 by Tim Wood 9
Both the Intermediate Term Breadth Momentum Oscillator and the Intermediate Term Volume Momentum Oscillator remain positive. Down turns here should serve as confirmation of the counter-trend top. 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 upside. The Ratio Adjusted McClellan Oscillator has turned lower in association with what should be the counter-trend top and is now sitting marginally below its trigger line. A cross back below the zero line in conjunction with a short-term sell signal and a crossing below the zero line will leave equities positioned for even greater weakness into the trading cycle low. Copyright 2018 by Tim Wood 11
Next is the Smoothed McClellan Oscillator, which remains above its trigger line. Copyright 2018 by Tim Wood 12
The Accumulation/Distribution Index is also suggestive of the counter-trend top. In Summary, the bounce out of the half-trading cycle low should have run its course and we should have a failed and left-translated trading and intermediate-term cycle top in place. We still need to see the triggering of sell signals, but the assumption is that the top is in place and the risks associated with the current structure is definitely high! Copyright 2018 by Tim Wood 13
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 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 With the price action on Tuesday carrying price above the October high, we have a forced change with the phasing of the trading cycle. That being, rather than the October 31st low having marked the trading cycle low, the structural developments now dictate that the trading cycle extended with the low having been seen on November 11th. This is not an ideal phasing, but it is what it is and the timing band for the next trading cycle low now runs between December 10th and December 24th. Once a daily swing high is formed and confirmed by a downturn of the daily CTI, the trading cycle top should be in place. A daily swing high will be completed on Wednesday if 1,247.50 is not bettered and if 1,235.80 is violated. From an intermediateterm perspective, this is a continuation of the intermediate-term advance out of the August low, but it should nonetheless still be countertrend. Copyright 2018 by Tim Wood 14
Our daily chart of the XAU is next. Because of the violation of the October 31st trading cycle low in conjunction with the decline into the November 13th daily swing low, the expectation has been and continues to be for the advance out of the November 13th low to be counter-trend. But, price is obviously trying to resist this structure. Per the parameters given in the weekend update, we saw the completion of another daily swing low on Monday that was confirmed by another upturn of the daily CTI, which re-triggered another short-term buy signal. But, the November 21st daily swing high has not been bettered, so the evidence with regard to this being a counter-trend advance remains intact and we saw a price reversal on Tuesday. Any further weakness on Wednesday that completes the formation of a daily swing high and is accompanied by a downturn of the daily CTI will re-trigger another short-term sell signal, which will leave price structured for further weakness. As structural confirmation that this counter-trend advance has run its course we will also need to see the completion of another weekly swing high. A daily swing high will be completed on Wednesday if 67.21 is not bettered and if 65.95 is violated. Copyright 2018 by Tim Wood 15
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 5 3 3 Stochastic Daily Indicator Summary Short-Term Sell Primary Indicators Formation of a Daily Swing Sell Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Indicators 5 3 3 Stochastic The assumption has been and continues to be that the trading cycle top was seen on November 12th and that the low was seen on November 20th. The price action on Tuesday 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, with price reversing off of the lows, I question this sell signal and we need to see a close below Tuesday s low in order to confirm it. The issue with the Dollar at this juncture is that we have an intermediate-term cycle top due. Should we see this short-term sell signal confirmed with a close below Tuesday s low, then we probably have the trading cycle top in place and based on current structure it should in turn also mark the higher degree intermediateterm cycle top. In order to keep the structure of the trading and intermediate-term cycle positive and alive, we must see this trading cycle advance unfold with a right-translated structure that carries price above the November high. The first step in that direction is the completion of another daily swing low, which will occur on Wednesday if 96.30 holds and if 97.07 is violated. Copyright 2018 by Tim Wood 16
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 price action on November 29th completed the formation of a daily swing low that was confirmed by an upturn of the daily CTI, which in turn triggered a short-term buy signal. Based on the timing band for this low and the accompanying oscillator picture, the November 28th daily swing low should not have ideally marked the trading cycle low, because it fell just a little on the early side and the 5 3 3 stochastic was not pulled down to oversold levels. However, per the weekend update, until proven otherwise, the assumption will continue to be that an early trading cycle low was seen. In the event we see the completion of another daily swing high and downturn of the daily CTI in the next week or so, then we will at that time examine the evidence with regard to the trading cycle low occurring later within the timing band rather than having occurred early. Regardless of this phasing, we continue to have a short and intermediateterm buy signal in place. Copyright 2018 by Tim Wood 17
Crude Oil On November 27th a short-term buy signal was triggered and the oscillator picture has continued to be indicative of a bottom, but price struggled to get a toe hold. With Monday s advance and the follow through on Tuesday, the anticipated bounce finally managed to take hold. This advance is expected to be countertrend and may prove to even be associated with an intermediate-term advance, but should nonetheless be counter-trend. For now, the November 27th short-term buy signal will remain intact until another daily swing high and down turn of the daily CTI is seen. A daily swing high will be completed on Wednesday if 54.55 is not bettered and if 52.67 is violated. At a higher level, the seasonal and 3-year cycle tops are in place and it is for this reason the current bounce should be counter-trend. 2018 Cycles News & Views; All Rights Reserved timwood1@cyclesman.com Copyright 2018 by Tim Wood 18