Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on February 5, 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 Negative Low Positive High Gold Negative High Positive Low XAU Negative Low Positive Low Dollar Positive Low Negative Low Bonds Negative High Negative Low Crude Oil Negative Low Positive Low Unleaded Positive Low 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 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 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 5 3 3 Stochastic Cycle Momentum Indicator *When this indictor is it is negative for the market and visa versa. February 5, 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 push into the trading and intermediate-term cycle tops in Equities remains intact and with price having moved into the timing band for the trading cycle low, this trading cycle advance is stretched and extremely right-translated. As a result, the price/oscillator picture and the cyclical phasing are all primed for a top. However, until a daily swing high is formed and a short-term sell signal is triggered, this advance will remain intact. Once this trading cycle top is seen, the market will also then be in a position for the intermediateterm cycle top. The advance out of the December low is still expected to be counter-trend and it is still expected to peak in conjunction with Crude Oil, Commodities and I suspect Gold as well. Gold, the CRB and Crude Oil continue to hint of this top, but until sell signals are triggered across the board, there is no evidence that these tops are in place. This trading cycle top will also mark an opportunity to cap the intermediate-term cycle advance out of the December low, but we must see the completion of a weekly swing high along with a left-translated and ideally failed trading cycle advance, in order to structurally set this intermediate-term cycle up for a top. Once this intermediate-term cycle top is in place, the expectation is for Copyright 2019 by Tim Wood 5
the resumption of the decline into the higher degree cycle low in accordance with the higher degree setup. However, a daily swing high and short-term sell signal are the first step. Gold has triggered a short-term sell signal, which puts it at risk of a left-translated trading cycle top. The XAU has also triggered a short-term sell signal, but the sell signal is marginal and we need to see it reconfirmed. Once solid sell signals in both Gold and the XAU are in place and weekly swing highs are seen, the intermediate-term cycle tops should be in place. Crude Oil looks toppy, but we have yet to see the triggering of a short-term sell signal. Once triggered, the trading cycle top should be in place and as with everything else, that will be an opportunity to cap the intermediate-term cycle top as well. The CRB Index triggered a marginal short-term sell signal on Monday and we need to see a close below Monday s low in order to reconfirm it. Here too, this trading cycle top will be an opportunity to cap the intermediate-term cycle top as well. The Dollar reversed off of its lows last Thursday, which I said in the Thursday night update was suggestive of the trading cycle low. That price reversal has been followed by a short-term buy signal this week. Ideally I would still like to see another push down, but it is possible we have seen an early trading cycle low. As we await this cyclical confirmation, the short-term buy signal will stand until another daily swing high and downturn of the daily CTI is seen. A short-term sell signal was triggered in Bonds on Monday, which puts them at risk of a left-translated trading cycle top and an additional trading cycle down into the intermediate-term cycle low. More on the structure of the trading cycle in the Dollar and Bonds as this develops. Below is our distribution indicator. The red intermediate-term Advancing issues line is tied to the intermediate-term cycle and continues higher after having violated its October low. The green MA line remains 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 2019 by Tim Wood 6
The Trading Cycle Oscillator in the upper window remains marginally above its trigger line. The Momentum indicator in the upper window remains above its zero line. The 5 3 3 stochastic in the middle window has moved back to overbought levels. The first of our Primary Short-Term Indicators is the New High/New Low Differential, plotted with price, which has turned back up. Overall, these indicators continue to be suggestive of the trading cycle top, but we must see a short-term sell signal as the first level of evidence with regard to this top. The Trend Indicator remains positive in association with the advance out of the trading and intermediate-term cycle low. 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. The expectation continues to be that the advance out of the December 26th low is counter-trend. This trading cycle advance has moved into the timing band for the trading cycle low, so it is now extremely righttranslated. The oscillator picture remains ripe for a top and 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 a position for the setup in association with the intermediate-term cycle top, which will then leave the market positioned for the decline into the higher degree cycle lows. Until then, this advance will remain in force. Copyright 2019 by Tim Wood 8
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 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 also remain positive in association with their upturns out of the trading cycle low. The Ratio Adjusted McClellan Oscillator has made a minor down tick as is sits just above its trigger line. The triggering of a short-term sell signal, along with a downturn below the trigger line, will be indicative of the trading cycle top. Copyright 2019 by Tim Wood 10
Next is the Smoothed McClellan Oscillator, which remains above its trigger line. A cross below the trigger line in association with a short-term sell signal will be suggestive of the trading cycle top. Copyright 2019 by Tim Wood 11
Next is the Accumulation/Distribution Index, which has turned back up. The divergence we have seen is suggestive of the pending top, but until we see the triggering of a short-term sell signal, this advance will continue to remain in force. Bottom line, the higher degree setup with regard to the 4-year cycle top remains intact, but at the same time so does the advance out of the intermediate-term cycle low. Therefore, the standoff continues and consequently we remain in a holding pattern as we await the resolution of this setup. The opportunity to cap this intermediate-term advance will come with the triggering of a short-term sell signal, but until then, higher prices will remain possible. Because of this trading cycle s right-translation, the short-term risk has been relieved, but once this intermediate-term cycle top is in place, the market will again be in a high risk position. Short of another market miracle, the advance out of the December low should be counter-trend and the higher degree intermediate-term, seasonal and 4-year cycle low should still lie ahead. 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 price action on Monday completed the formation of a daily swing high that was confirmed by a downturn of the daily CTI. In doing so, a short-term sell signal was triggered, which now puts Gold at risk of a left-translated trading cycle top. The timing band for the next trading cycle low runs between February 19th and March 5th. We know that the intermediate-term cycle top is due and that this trading cycle top is an opportunity for the intermediate-term cycle top as well. Any further weakness that completes the formation of a weekly swing high will be indicative of the intermediate-term cycle top. For now, as a result of this sell signal, we have to assume that we have a left-translated trading cycle top in place until Gold can prove otherwise. A daily swing low will be completed on Wednesday if 1,312.70 holds and if 1,323.60 is bettered. Copyright 2019 by Tim Wood 13
Our daily chart of the XAU is next. The price action on Friday completed the formation of a daily swing high and on Monday price reversed off of its lows, but with the daily CTI turning down, a marginal shortterm sell signal was triggered. On Tuesday price moved higher, but with the CTI still negative, the sell signal is still intact, but only marginally so. In order to reconfirm this sell signal, we must see a close below Monday s swing low. Any further advance should be an additional push up into the trading cycle tops and as with Gold, we also have an intermediate-term top due here as well. 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. Another daily swing high will be completed on Wednesday if 76.32 is not bettered and if 75.12 is violated. Copyright 2019 by Tim Wood 14
Dollar 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 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 trading cycle low was seen on January 9th and the timing band for the pending trading cycle low runs between February 4th and February 18th. The price action on February 1st completed the formation of a daily swing low and the additional strength on Monday turned the daily CTI up, which triggered a shortterm buy signal. Ideally I would like to have seen another push down into the timing band, but it is possible we have seen an early trading cycle low. We are still early in this timing band and anytime a low occurs early in the band, or as in this case a couple of days prior to the band, it is possible to see another push down into the trading cycle low. Therefore, we have to see what the structure yields as we move further into this timing band. As we do so, the phasing will clarify itself. In the meantime, regardless of the phasing of the trading cycle, this 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 Wednesday if 95.86 is not bettered and if 95.54 is violated. 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 I have explained in recent updates and in the February letter that ideally there should be another trading cycle down into the intermediate-term cycle low. Last week we saw the completion of an intermediate-term buy signal, but the price action this week is reversing that buy signal and it appears as if Bonds are trying to make that additional push down into the intermediate-term cycle low. On Monday a short-term sell signal was triggered and every indication is that we have a failed and left-translated trading cycle in the making, which we will assume is the case until another short-term buy signal is triggered. Bottom line, the structure of this trading cycle remains key with respect to the confirmation of the intermediate-term cycle low.. Copyright 2019 by Tim Wood 16
Crude Oil The previously triggered short and intermediate-term buy signals remain intact while the price/oscillator picture remains ripe for a top. The expectation that the advance out of the December low is counter-trend has not changed, but until we get a short-term sell signal that is followed by the completion of a weekly swing high and downturn of the weekly CTI, this advance will remain intact. That said, conditions remain extremely ripe for a top and in light of the current oscillator picture and the price reversal seen on Tuesday, Crude Oil is an a position in which the probability for a downturn is good. A daily swing high will be completed again on Wednesday if 55.75 is not bettered and if 53.29 is violated, which with the daily CTI negative will trigger a short-term sell signal. I again remind you that Crude Oil peaked in conjunction with Equites in October, bottomed in conjunction with Equities in December and the expectation is for this intermediate-term cycle advance to also peak in conjunction with Equities. 2019 Cycles News & Views; All Rights Reserved timwood1@cyclesman.com Copyright 2019 by Tim Wood 17
Copyright 2019 by Tim Wood 18