Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on February 12, 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 High Gold Negative High Positive Low XAU Negative High Positive High Dollar Positive Low Positive Low Bonds Negative High Negative Low Crude Oil Positive Low Positive High Unleaded Positive Low Positive Low Natural Gas Positive 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 2019 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 2019 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 5 3 3 Stochastic Cycle Momentum Indicator *When this indictor is it is negative for the market and visa versa. February 12, 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 5 3 3 Stochastic Cycle Momentum Indicator Trading Cycle Oscillator Momentum Indicator Ratio Adjusted McClellan Oscillator Crossover Accumulation/Distribution Index The Industrials bounced off of their lows on Friday. On Monday more strength followed completing the formation of a daily swing low and as a result of the continued advance on Tuesday, another short-term buy signal was triggered. We knew the trading cycle advance had become extremely right-translated and that the trading cycle top and decline into the trading cycle low was due. With the completion of a daily swing high not being seen until last Thursday and the triggering of a short-term sell signal not occurring until Friday, further weakness into the trading cycle low was expected, per the red analog on the second chart below. But, as a result of Monday s completion of a daily swing low and Tuesday s triggering of a shortterm buy signal, the evidence now dictates that we saw a very shallow decline into the trading cycle low and that a new trading cycle advance has begun. We are still operating within the timing band for this low, so there is a possibility the low still lies ahead, but until the market can prove that this is the case, the assumption is that the trading cycle low has probably been seen. That said, the expectation is for the advance out of the December low to be counter-trend and that it should be at or near its peak. If that is in Copyright 2019 by Tim Wood 5
fact going to prove to be the case, then per the red analog line in the second chart below, as I have previously explained, this trading cycle should peak with a failed and/or left-translated structure. Therefore, while the trading cycle low appears to have come a week early and the decline into the trading cycle low did not complete the formation of a weekly swing high, the test with regard to the intermediate-term cycle top is on track in that it is now the current trading cycle advance that is key. Therefore, this trading cycle advance is now our primary focus. The expectation has been and still is for Equities, Crude Oil, the CRB complex and Gold to all turn down together. The short-term sell signal in Gold and the XAU remain intact, but we have thus far, seen little headway with Gold and ultimately we must see the completion of weekly swing highs in order to mark this top. Crude Oil triggered a short-term buy signal on Tuesday and the evidence there is also suggestive of the trading cycle low. The same is also true on the CRB Index, but in that case the buy signal was very weak. The short-term buy signal in the Dollar remains intact, but given the price reversal seen on Tuesday, it is now at risk of a trading cycle top. Bonds triggered a short-term sell signal on Tuesday, which is now suggestive of them having made a trading cycle top as well. Below is our distribution indicator. The red intermediate-term Advancing issues line is tied to the intermediate-term cycle, which has moved significantly higher and looking back in history, the bag is mixed with regard to the magnitude of the advance we have now seen. I need more time to research this and I will give you my findings in the weekend updated. The green MA line remains above the black MA line. Copyright 2019 by Tim Wood 6
The Trading Cycle Oscillator in the upper window has not yet turned back above its trigger line. The Momentum indicator in the upper window remains marginally below its zero line. The 5 3 3 stochastic in the middle window has moved slightly back above its trigger line. The first of our Primary Short-Term Indicators is the New High/New Low Differential, plotted with price, which has turned back up. The Trend Indicator remains positive. The analog I first showed in the February letter is noted in red to the right of price. As stated above, as a result of the completion of a daily swing low and the triggering of a short-term buy signal, the evidence suggests that the trading cycle low was seen earlier than anticipated, but the test with regard to the possible intermediate-term cycle top is now at hand with the bounce out of the trading cycle low in that a left-translated structure is needed if this is going to mark the intermediate-term cycle top. Copyright 2019 by Tim Wood 7
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, a daily swing low was completed on Monday and a short-term buy signal was triggered on Tuesday. As a result, the evidence is suggestive of the trading cycle low, which we will assume to be in place unless the market can prove otherwise. Regardless of the phasing of the trading cycle, this short-term buy signal will remain intact until another daily swing high and downturn of ALL Three of the Primary Short- Term Indicators is seen. This continues to be a technical juncture and opportunity to cap the intermediateterm/counter-trend advance out of the December low, but we must see a left-translated trading cycle top and the triggering of an intermediate-term sell signal as evidence to that effect. Copyright 2019 by Tim Wood 8
No change here. The Intermediate Term Breadth Momentum Oscillator remains above its trigger line while the Intermediate Term Volume Momentum Oscillator continues to weaken. A downturn by both indicators will be further suggestive of the trading cycle and anticipated higher degree cycle top. Copyright 2019 by Tim Wood 9
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 remain positive, so there have been no changes here either. The Ratio Adjusted McClellan Oscillator has turned up, but remains below its trigger line. Copyright 2019 by Tim Wood 10
Next is the Smoothed McClellan Oscillator, which also remains below its trigger line. Copyright 2019 by Tim Wood 11
The Accumulation/Distribution Index has turned up and in doing so it too is suggestive of the trading cycle low. In Summary, the higher degree setup with regard to the 4-year cycle top remains intact and short of another market miracle and the forcing of one of the alternatives, the higher degree intermediate-term, seasonal and 4-year cycle low should still lie ahead. Within the context of the higher degree setup, it appears we have already seen the trading cycle low. As I have recently explained, we must see the triggering of an intermediate-term sell signal and a failed and/or left-translated trading cycle advance in conjunction with this trading cycle advance as evidence that this intermediate-term/countertrend advance has run its course. That test is now at hand with this trading cycle advance. Copyright 2019 by Tim Wood 12
Gold End of Week Intermediate-Term Indicator Summary Intermediate-Term Neutral Daily Indicator Summary Short-Term Sell 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 High Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Secondary Short Term Indicators 5 3 3 Stochastic The February 4th short-term sell signal remains intact, but it has yet to make much progress lower. Monday price completed the formation of a daily swing high and Tuesday was an inside day. As Gold currently sits, it continues to be at risk of a left-translated trading cycle top, which uncorrected will be indicative of the intermediate-term cycle top, which is now due. Any further advance that carries Gold above the February 1st daily swing high will correct what has set up to be a lefttranslated trading cycle top. On the other hand, failure to better the February 1st high and further weakness below the February 7th daily swing low will be suggestive of the intermediate-term cycle top. Therefore, the test of the intermediate-term cycle top continues to be at hand in conjunction with this trading cycle. The timing band for the next trading cycle low runs between February 19th and March 5th. A daily swing low will be completed on Wednesday if 1,307.10 holds and if 1,318.70 is bettered. Should this happen, Gold will be positioned to correct the lefttranslated structure of the trading cycle that is trying to take hold. Copyright 2019 by Tim Wood 13
Our daily chart of the XAU is next. The short-term sell signal from February 4th has managed to hold and on Tuesday we finally saw the close below the February 4th low we have been needing to see. In doing so, the trading cycle top has been confirmed and ideally further weakness into the trading cycle low should still lie ahead. Also, as I have explained, the intermediate-term cycle top is due here and as of the close on Tuesday we have a marginal weekly swing high in the making. Once a weekly swing high is formed and confirmed in both Gold AND the XAU, we should have the intermediate-term cycle tops in place. Until then, we cannot say the intermediate-term advance has run its course. That said, as I have also explained, the opportunity for this top in conjunction with the current trading cycle top was possible and the test of that high is now at hand. A daily swing low will be completed on Wednesday if 73.95 holds and if 75.24 is bettered. Once a daily swing low is seen, we will have to examine the evidence with regard to the trading cycle low at that time. Copyright 2019 by Tim Wood 14
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 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 runs between February 4th and February 18th. The Dollar has again moved to overbought levels and in light of the price reversal seen on Tuesday, the Dollar is positioned to move lower in conjunction with Bonds. Any further decline that completes the formation of a daily swing high that is also confirmed by a downturn of the daily CTI, will trigger a short-term sell signal. It continues to appear as if the trading cycle low was seen early on January 31st, or this trading cycle advance is now extremely right-translated. If the trading cycle low was seen on January 31st, then the completion of a daily swing high and the triggering of a short-term sell signal here will put the Dollar at risk of a left-translated trading cycle top. It is for this reason that we still need to get through the remainder of the timing band for this low in order to confirm this phasing. Bottom line, phasing aside, any further weakness on Wednesday is likely to trigger a short-term sell signal and the phasing of the trading cycle should clarify itself within the next week. A daily swing high will be completed on Wednesday if 97.00 is not bettered and if 96.44 is violated. With the intermediate-term cycle low seemingly in place, further strength should still lie ahead, but the completion of a daily swing high here is, in the meantime, going to put the Dollar at risk of a lefttranslated trading cycle top. More on this as we see what the move through the remainder of the timing band brings. Copyright 2019 by Tim Wood 15
Bonds End of Week Intermediate-Term Indicator Summary Intermediate-Term Buy/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 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 Short Term Indicators 5 3 3 Stochastic Bonds reversed off their highs on Monday and on Tuesday they completed the formation of a daily swing high that was confirmed by a downturn of the daily CTI, plotted with price. In doing so, a short-term sell signal was triggered and with the January 31st high not bettered, Bonds remain at risk of a left-translated trading cycle top. Bonds have moved into the early side of the timing band for the trading cycle low and the current price/oscillator picture leaves them positioned to move lower into that now due low. Any additional probe up from here should be a final retest of the trading cycle top. Copyright 2019 by Tim Wood 16
Crude Oil Crude Oil continues to move in a similar cyclical pattern to that of Equites in that it too completed the formation of a daily swing low, which was confirmed by an upturn of the daily CTI, which in turn triggered a short-term buy signal. As with Equities, in the weekend update I said that ideally there should still be further weakness into the trading cycle low to go, as the oscillators move to oversold levels, but that once a daily swing low and upturn of the daily CTI was seen, we should have the trading cycle low in place. As a result of Tuesday s buy signal, here too it appears as if the trading cycle low has been seen. Also as with Equities, the expectation has been for the advance out of the December low to be counter-trend and we have known that this trading cycle top would be an opportunity to cap this intermediate-term/counter-trend advance. We also have a squeaker of a weekly swing high in the making, which is suggestive of the intermediate-term cycle top. If we now see a failed and/or left-translated trading cycle advance, we should have confirmation of the intermediate-term cycle top. Otherwise, the advance in Crude is not done. A daily swing high will be completed on Wednesday if 54.05 is not bettered and if 52.29 is violated. 2019 Cycles News & Views; All Rights Reserved timwood1@cyclesman.com Copyright 2019 by Tim Wood 17
Copyright 2019 by Tim Wood 18