Cycle Turn Indicator Direction and Swing Summary of Select Markets as of the close on January 4, 2018 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 High Positive Low XAU Negative Low Positive Low Dollar Positive Low Negative High Bonds Negative Low Negative High Crude Oil Positive Low Positive Low Unleaded Negative Low Positive Low 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
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.
January 4, 2018 Stocks End of Week Weekly Indicator Summary Intermediate-Term Buy 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 Bearish *When this indictor is it is negative for the market and visa versa. Daily Indicator Summary Short-Term Buy 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 I ve been working on the January letter this week and have consequently spent a lot of time looking at data. I know that it is contrary to popular belief, but it still looks like Commodities are peaking. We saw a short-term sell signal and what is now a weekly reversal in Natural Gas on Thursday. Gasoline, while still on a buy signal, continues looking heavy at this point. Crude Oil moved to yet another post 2016 high and both the short and intermediate-term buy signals remain intact. However, the evidence also continues to suggest that price is moving into what should be the intermediate-term and seasonal cycle top. The ongoing short and intermediateterm buy signals in the Metals complex also remain intact, but here too, the evidence still suggests that this is also a counter-trend advance and that the entire Commodity Complex should be moving into a major top. In the meantime, with the exception of Natural Gas the buy signals remain intact in the Energy and Metals sectors. The Dollar triggered a short-term buy signal on Thursday, but because of the reversal that also occurred, I want to see further confirmation of this buy signal. Regardless, the Dollar should be at or near the trading cycle low
and what should also prove to be the intermediate-term cycle low as well. Bonds are either retesting their trading cycle low, or we have a failed and left-translated trading cycle at play. With price still operating within the timing band for the trading cycle low we do not yet know which one we are seeing, but this is now looking more like a retest. If we see the trading cycle low here in the Dollar, I m thinking we will see a corresponding advance in Bonds. In Equities, we saw a short-term sell signal on the Industrials on December 21st. I knew the sell signal was marginal and have tried to make it clear here since the sell signal was triggered that I did not trust the signal and that we needed to see further confirmation of the signal. Additional confirmation never came and on Wednesday the Industrials moved above their most recent high. Then, on Thursday, the December 21st short-term sell signal was reversed with another shortterm buy signal. The timing band for the current trading cycle low runs between December 27th and January 16th. Until we see a solid short-term sell signal that is confirmed by the balance of our indicators and price structure, we cannot say that the trading cycle top has been seen. And, until a trading cycle top is confirmed and followed by the completion of a weekly swing high and downturn of the weekly CTI, we cannot say that the intermediate-term cycle top has been seen. That said, we know that we have an intermediate-term cycle low due by mid- February, so we should be pressing into that top in conjunction with this trading cycle. However, in the absence of the DNA Markers, I do not see an intermediate-term top at this time corresponding with a more meaningful top. Even if we see the seasonal cycle top here, every indication is that Equities are not done. As I have said in the last couple of updates, we have entered into the early side of a very important cyclical juncture and we should not be too terribly long from seeing the result of this juncture. I will get into this all in the January letter as the details are beyond the scope of an update. I m actually excited here because for the first time in a long time I feel that we have more clarity on what is setting up and once we see the result of this cyclical juncture I think that we will have even better clarity. After I release the letter and the outcome of this cyclical juncture begins to manifest, I will do an interview further explaining the implications as sometimes its much quicker and easier to explain things in spoken words rather than print. I will also be getting Peter back on soon as well.
The first chart below shows our distribution indicator. The red intermediate-term Advancing issues line is tied to the intermediate-term cycle, which continues moving up. The green line remains above the black line, however, the divergence that is forming here also continues to be indicative of the pending intermediate-term cycle top.
The Trading Cycle Oscillator in the upper window has turned back up above its trigger line. The Momentum indicator in the upper window has also moved back above its zero line. The 5 3 3 stochastic in the middle window remains positive and 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 remains positive. The Trend Indicator has crossed once again back above its trigger line. Looking at the oscillator picture here, it is beginning to look like the December 26th low possibly marked yet another shallow trading cycle low. As we move a little further into the timing band this should clarify itself.
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. While the December 21st short-term sell signal has on the one hand been in place, on the other hand we have also needed to see additional confirmation of that signal because we knew that it was marginal. That additional confirmation never came and now with a daily swing low and ALL Three of these indicators positive, another short-term buy signal has been triggered.
Both the Intermediate Term Breadth Momentum Oscillator and the Intermediate Term Volume Momentum Oscillator remain positive. Here too, these indicators never confirmed the December 21st short-term sell signal and higher prices have consequently followed.
The McClellan Oscillator and Summation Indexes are also used to measure the intermediateterm 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 Volume Summation Index and the McClellan Summation Index remain positive. The Ratio Adjusted McClellan Oscillator remains above the trigger line I ve added and as we have also discussed here, these indicators did not properly confirm the previous shortterm sell signal, which has in turn lead to what may have been a weak decline into the trading cycle low and now the reversal of the short-term sell signal.
Next is the Smoothed McClellan Oscillator, which remains above its trigger line. Here too, we never saw confirmation of the sell signal with a cross below the trigger line.
The short-term Accumulation/Distribution Index is again positive. In Summary: The marginal short-term sell signal on the Industrials was reversed and we may have even seen another mild decline into a trading cycle low. The Dollar, Gold, Oil and the overall Commodity Complex is at cyclical junctures in which the opportunity for turns are now at hand. This short-term buy signal on the Industrials will now remain intact until it is reversed with another short-term sell signal. We know that the Industrials are pressing into their intermediate-term cycle top, but in the absence of the DNA Markers, any top at this time is not expected to mark a more meaningful top. How the Dollar, Gold, Oil and the Commodity Complex respond to the current/pending turn points is going to play into the overall setup with Equities, but again, they are not likely to be done at this juncture. The results from the cyclical juncture of the Dollar, Gold, Oil and the Commodity Complex must occur first, as that will then pave the way for the setup with Equites. Stay Tuned.
Gold End of Week Weekly 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 Bearish 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 Bearish Secondary Short Term Indicators 5 3 3 Stochastic Bearish The timing band for the pending trading cycle low runs between January 5th and January 19th. The oscillator picture remains ripe for this top and once a daily swing high is formed and confirmed by a downturn of the daily CTI, plotted with price, it should be in place. At this time, I still think that this has been a counter-trend advance and if the decline into the pending trading cycle low completes the formation of a weekly swing high that is confirmed by a downturn of the weekly CTI, then we should have the intermediate-term cycle top in place, which in turn should cap the counter-trend advance. In the absence of the completion of a weekly swing high, then further strength in association with this intermediate-term cycle advance should be expected to follow in the wake of the trading cycle low. For now, this shortterm buy signal will remain intact until another daily swing high is formed and confirmed by a downturn of the daily CTI. A daily swing high will be completed on Friday if 1,327.30 is not bettered and if 1,307.10 is violated.
Next is our daily chart of the XAU. Here too, the short and intermediate-term buy signals remain intact, but as we have seen at most of the turn points, the XAU has had a tendency to lead, which it currently appears to be trying to do here as well. Both the 5 3 3 stochastic and the daily CTI turned down on December 29th and the resulting oscillator divergence continues to be suggestive of the trading cycle top. Once a daily swing high is formed AND confirmed by a downturn of the daily CTI, a short-term sell signal will be triggered and this top should be in place. As with gold, 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. Otherwise, higher prices are likely to follow. The advance out of the pending trading cycle low is going to be very important. More on that once we get there. A daily swing high will be completed on Friday if 88.26 is not bettered and if 85.91 is violated.
Dollar End of Week Weekly Indicator Summary Intermediate-Term Sell Primary Indicators Formation of a Weekly Swing High Bearish Cycle Turn Indicator (CTI) Bearish Confirming Indicators Trend Indicator (TI) Bearish Cycle Momentum Indicator Bearish Secondary Indicators 5 3 3 Stochastic Bearish Daily Indicator Summary Short-Term Buy Primary Indicators Formation of a Daily Swing Low Cycle Turn Indicator (CTI) Confirming Indicators Trend Indicator (TI) Bearish Cycle Momentum Indicator Bearish Secondary Indicators 5 3 3 Stochastic The timing band for the current trading cycle low ran between December 21st and January 4th. Conditions have been extremely ripe for this low and on Wednesday a daily swing low was completed, per the parameters given here on Tuesday night. On Thursday the Dollar initially moved above Wednesday s high, but then reversed lower. In spite of that reversal, the daily CTI, plotted with price, turned up. In doing so, a short-term buy signal was triggered. Because of the reversal seen on Thursday, I have to say that this buy signal is marginal, but it is there. However, in order to confirm this buy signal we need to see a move above Thursday s high. If this occurs on Friday, then this short-term buy signal should prove to confirm the trading cycle low. We have now moved just outside of the timing band for this low and ideally the trading cycle low should be in place, but any additional push down from here should be a final push into the trading cycle low.
Bonds End of Week Weekly Indicator Summary Intermediate-Term Sell Primary Indicators Formation of a Weekly Swing High Bearish Cycle Turn Indicator (CTI) Bearish Confirming Indicators Trend Indicator (TI) Cycle Momentum Indicator Bearish Secondary Indicators 5 3 3 Stochastic Bearish Daily Indicator Summary Short-Term Buy/Neutral Primary Indicators Formation of a Daily Swing Low Cycle Turn Indicator (CTI) Bearish Confirming Indicators Trend Indicator (TI) Bearish Cycle Momentum Indicator Secondary Short Term Indicators 5 3 3 Stochastic Bearish The timing band for the now due trading cycle low runs between December 21st and January 11th. Given the previously triggered short-term buy signal, we could only assume that the trading cycle low was seen on December 20th. However, at the same time I have also made it clear that with price still within the timing band for this trading cycle low, along with the current overbought reading, per the 5 3 3 stochastic, it is possible that another push down into this trading cycle low could still lie ahead. Because of the broad range seen on December 27th, along with the fact that all of the price action since December 27th has occurred within that broad range, a daily swing high has still not formed and for that reason, there has been no change here. Any further weakness that violates the December 27th low will create a daily swing high and a short-term sell signal will be triggered. For now, the assumption continues to be that we have the trading cycle low in place, but until Bonds move back above the December 27th high, the risk of a left-translated trading cycle also remains.
Crude Oil The December 18th short-term buy signal still remains intact and at overbought levels, per the 5 3 3 stochastic as price continues probing for the trading cycle top. However, the evidence also continues to suggest that the energy complex is pressing into a higher degree top. Once this trading cycle top is in place it will mark an opportunity for the higher degree intermediate-term and seasonal cycle, which should ideally prove to develop as the decline out of the trading cycle top takes hold. However, until a daily swing high is formed and confirmed by a downturn of the daily CTI, this short-term buy signal will remain intact. A daily swing high will be completed on Friday if 62.21 is not bettered and if 61.59 is violated.
Gasoline I have again included a chart of Gasoline, which has also been moving up out of its December trading cycle low. Price remains flat and with the oscillators turning down, the price/oscillator picture is suggestive of the pending trading cycle top. Any further decline that completes the formation of a daily swing high will trigger a short-term sell signal and this top should then be confirmed. We know Crude Oil, Gasoline and Natural Gas all ebb and flow to a very similar rhythm, so this is telling us that Crude Oil should also be nearing their top as well. A daily swing high will be completed on Friday if 1.81 is not bettered and if 1.77 is violated.
Natural Gas In the Tuesday night update I said that the price/oscillator picture in Gasoline was suggestive of the anticipated top in Crude Oil and Natural Gas. In light of the big down day seen on Thursday in Natural Gas a short-term sell signal was triggered, which suggests that this top should ideally now be in place in Natural Gas. Furthermore, we also now have a big downside reversal underway on the weekly chart, which is also suggestive of the anticipated top. We will of course need to see the completion of a weekly swing high and a downturn of the weekly CTI next week in order to trigger an intermediate-term sell signal, which upon such a development should serve as pretty solid evidence that this counter-trend advance has run its course. Again, knowing that Natural Gas, Gasoline and Crude Oil all ebb and flow to a very similar cyclical rhythm, in light of the price action we are seeing here in Natural Gas it is suggestive that Gasoline and Crude Oil should also soon follow. 2017 Cycles News & Views; All Rights Reserved Click Below To Contact the Web Master tim@cyclesman.com