cycle turn indicator direction and swing summary of select ... · pdf filefebruary 1, 2018...

Cycle Turn Indicator Direction and Swing Summary

of Select Markets as of the close on

February 1, 2018

Market Daily CTI

Daily Swing

Weekly CTI

Weekly Swing

Industrial Negative High Negative LowTransports Negative High Negative High

NDX Negative High Positive LowS&P Inverse Fund Positive N/A * Negative High

CRB Index Negative Low Positive LowGold Negative Low Positive LowXAU Negative Low Positive High

Dollar Positive High Negative HighBonds Negative High Negative High

Crude Oil Negative Low Negative LowUnleaded Negative High 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

© Copyright 2017 by Tim Wood

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.


http://www.cyclesman.info/New%20Subscriber%20Info.htm




February 1, 2018

StocksEnd of Week Weekly Indicator Summary Intermediate-Term BuyEnd of Week Weekly Indicator Summary Intermediate-Term BuyPrimary Indicators Primary Indicators Formation of a Weekly Swing Low BullishCycle Turn Indicator (CTI) BullishCTI on Rydex Tempest Fund * BearishConfirming IndicatorsConfirming IndicatorsTrend Indicator (TI) BullishAdvance/Decline Issues Diff BullishNew High New Low Diff BullishSecondary IndicatorsSecondary Indicators5 3 3 Stochastic BullishCycle Momentum Indicator Bullish*When this indictor is Bullish it is negative for the market and visa versa.*When this indictor is Bullish it is negative for the market and visa versa.

Daily Indicator Summary Short-Term SellDaily Indicator Summary Short-Term SellPrimary Indicators Primary Indicators Formation of a Daily Swing High BearishCycle Turn Indicator (CTI) BearishSlow Cycle Turn Indicator (CTI) BearishNew High/New Low Differential BearishConfirming IndicatorsConfirming IndicatorsTrend Indicator (TI) BearishMcClellan Intermediate Term Breadth Momentum Oscillator (ITBM)

Bearish

McClellan Intermediate Term Volume Momentum Oscillator (ITVM)

Bearish

McClellan Summation Index BearishMcClellan Volume Summation Index Bearish

Secondary Short Term IndicatorsSecondary Short Term Indicators5 3 3 Stochastic BearishCycle Momentum Indicator BearishTrading Cycle Oscillator BearishMomentum Indicator BearishRatio Adjusted McClellan Oscillator Crossover

Bearish

Accumulation/Distribution Index Bearish

We remain at an important turn point in Equities, Gold, Crude Oil and Commodities, which I think is for the most part centered around the pending intermediate-term cycle low in the Dollar. The Dollar is now moving toward the outer parameter of the timing band for this low and it should bottom in conjunction with the now pending trading cycle low. A definitive intermediate-term cycle low in the Dollar has yet to be made, which I think is the reason a definitive turn in the other asset classes has not yet been seen. The short-term sell signal that was triggered earlier this week in Gold, the XAU and Crude Oil remains intact, but we also now have daily swing lows in place as this turn struggles to further evolve. In order to reconfirm these short-term sell signals we must see lower prices below the previous daily swing low and we must see this short-term sell signal evolve into a weekly swing high and intermediate-term sell signal as evidence of the higher degree cycle tops. Therefore, nothing has changed here in that the various intermediate-term cycle tops are due in conjunction with the intermediate-term cycle low in the Dollar and while the current short-term signals are indeed an opportunity for these


higher degree turns, we must see it take hold in the form of intermediate-term signals. We still have the previously triggered short-term sell signals on most major Equity averages, including the Industrials, the Transports, the S&P, the AMEX, the NYSE Composite, the Tel Aviv 35, the CAC, the DAX and the FSTE. So, yes, it appears that this turn point is trying to take hold, but this must still further evolve with respect to the intermediate-term cycle tops.

The first chart below shows our distribution indicator. The red intermediate-term Advancing issues line is tied to the intermediate-term cycle, which continues rolling over. The green line remains above the black line, but continues to roll back over. A cross below the black line in conjunction with the ongoing divergence should serve as additional confirmation of the anticipated intermediate-term cycle top.


The Trading Cycle Oscillator in the upper window remains negative. The Momentum indicator in the upper window has finally turned below its zero line, which is suggestive of the trading cycle top. The 5 3 3 stochastic in the middle window is now approaching oversold levels. The first of our Primary Short-Term Indicators is the New High New Low Differential, plotted with price, which remains negative. The Trend Indicator has turned below its trigger line, which is also suggestive of the trading cycle top.


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.

Conditions have been extremely ripe for the trading cycle top and what should also prove to be the higher degree intermediate-term cycle top. The short-term sell signal that was triggered on Monday remains intact and the oscillator picture is suggestive of the trading cycle top. But, as resilient as this market has been, we need to see a move below Tuesday’s low in order to further confirm this signal. The next step with regard to the intermediate-term cycle top will be the completion of a weekly swing high.


Both the Intermediate Term Breadth Momentum Oscillator and the Intermediate Term Volume Momentum Oscillator remain clearly below their trigger lines, which is suggestive of the now due tops.


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 Volume Summation Index and the McClellan Summation Index remain clearly in gear to the downside as well, which is also suggestive of this overdue top. The Ratio Adjusted McClellan Oscillator remains below the trigger line. There are typically divergences at trading and intermediate-term cycle lows, so this decline should have further yet to go.


Next is the Smoothed McClellan Oscillator, remains well below its trigger line.


The short-term Accumulation/Distribution Index remains negative.

In Summary: We remain within the turn point in association with the pending trading and what should be the intermediate-term cycle low in the Dollar. As a result of the sell signals that we have seen and the price action seen this week, this turn point is obviously trying to take hold. But, we must next see an intermediate-term buy signal in the Dollar and corresponding sell signals in the other asset classes if it is going to bite! More on this as it develops.


GoldEnd of Week Weekly Indicator Summary Intermediate-Term BuyEnd of Week Weekly Indicator Summary Intermediate-Term Buy

Primary Indicators Primary Indicators

Formation of a Weekly Swing Low BullishCycle Turn Indicator (CTI) BullishConfirming IndicatorsConfirming IndicatorsTrend Indicator (TI) BullishCycle Momentum Indicator BullishSecondary IndicatorsSecondary Indicators

5 3 3 Stochastic Bearish

Daily Indicator SummaryShort-Term NeutralDaily Indicator SummaryShort-Term Neutral

Primary Indicators Primary Indicators

Formation of a Daily Swing Low BullishCycle Turn Indicator (CTI) BearishConfirming IndicatorsConfirming IndicatorsTrend Indicator (TI) BullishCycle Momentum Indicator BearishSecondary Short Term IndicatorsSecondary Short Term Indicators

5 3 3 Stochastic Bullish

I had said that the last trading cycle low was seen on January 10th, but looking at the price/oscillator picture at this juncture, I think that the January 18th daily swing low is a better fit. Based on that phasing, the timing band for the next trading cycle low runs between February 13th and February 27th. The price action on Monday completed the formation of a daily swing high, which was confirmed by a downturn of the daily CTI, plotted with price, which triggered a short-term sell signal. The price action on Wednesday completed the formation of another daily swing low and on Thursday more strength followed. However, with the daily CTI still negative, Monday’s short-term sell signal still stands. This short-term sell signal is an opportunity to also cap the anticipated intermediate-term cycle top, but we must see the completion of a weekly swing high that is confirmed by a downturn of the weekly CTI as evidence of that higher degree cycle top. As a result of Wednesday’s completion of a daily swing low, Gold is positioned structurally to move higher. Any further advance that turns the daily CTI up will retrigger another short-term buy signal and what may then be followed by another high before this advance runs its course. On the other hand, any further weakness from here that carries Gold below Tuesday’s low will serve to reconfirm the short-term sell signal. Overall, the intermediate-term cycle top should be in the making, but we need to see a short-term sell signal evolve into a weekly swing high and intermediate-term sell signal as evidence of that higher degree top.


Next is our daily chart of the XAU. The price action on Thursday completed the formation of a daily swing low, but with the daily CTI still negative the previously triggered short-term sell signal from January 25th remains intact. As a result of the completion of a weekly swing high this week, the downturn of the Trend Indicator and the violation of what I think was a trading cycles low on January 23rd, this should be a counter-trend advance. In order to reconfirm this phasing and the short-term sell signal, we must see Wednesday’s low violated. Overall, the intermediate-term cycle top should be in the making. More on this as it develops.


DollarEnd of Week Weekly Indicator Summary Intermediate-Term SellEnd of Week Weekly Indicator Summary Intermediate-Term Sell

Primary Indicators Primary Indicators Formation of a Weekly Swing High BearishCycle Turn Indicator (CTI) Bearish

Confirming IndicatorsConfirming IndicatorsTrend Indicator (TI) Bearish

Cycle Momentum Indicator BearishSecondary IndicatorsSecondary Indicators5 3 3 Stochastic Bullish

Daily Indicator SummaryShort-Term NeutralDaily Indicator SummaryShort-Term Neutral

Primary Indicators Primary Indicators Formation of a Daily Swing High BearishCycle Turn Indicator (CTI) Bullish

Confirming IndicatorsConfirming IndicatorsTrend Indicator (TI) Bearish

Cycle Momentum Indicator BullishSecondary IndicatorsSecondary Indicators5 3 3 Stochastic Bearish

The timing band for the now due trading cycle low runs between between January 26th and February 9th. Given that this is the last trading cycle within the timing band for the higher degree intermediate-term cycle low, this trading cycle low should coincide with the higher degree intermediate-term cycle low. In light of the reversal off of the low on January 25th, along with the accompanying divergent oscillator picture and the short-term buy signal that was triggered on January 29th, there is still a good chance that the trading cycle low could be in place. That said, we have known that the January 29th short-term buy signal was marginal and that we need to see a decisive move above the January 29th high in order to further confirm that buy signal and so far we have not seen such a move. Should we see a violation of the January 25th low over the next few days, then it should prove that such a move is associated with a final push down into the trading cycle low.


BondsEnd of Week Weekly Indicator Summary Intermediate-Term SellEnd of Week Weekly Indicator Summary Intermediate-Term SellPrimary Indicators Primary Indicators Formation of a Weekly Swing High BearishCycle Turn Indicator (CTI) BearishConfirming IndicatorsConfirming IndicatorsTrend Indicator (TI) BearishCycle Momentum Indicator BearishSecondary IndicatorsSecondary Indicators5 3 3 Stochastic Bearish

Daily Indicator SummaryShort-Term Neutral/SellDaily Indicator SummaryShort-Term Neutral/SellPrimary Indicators Primary Indicators Formation of a Daily Swing High BearishCycle Turn Indicator (CTI) BearishConfirming IndicatorsConfirming IndicatorsTrend Indicator (TI) BearishCycle Momentum Indicator BearishSecondary Short Term IndicatorsSecondary Short Term Indicators5 3 3 Stochastic Bearish

No Change with Bonds. The timing band for the current trading cycle low runs between January 12th and February 5th. With price having moved into the timing band for the trading cycle low, once a daily swing low is formed and confirmed by an upturn of the daily CTI, plotted with price, a short-term buy signal will be triggered and the trading cycle low should be in place. Longer-term, the March seasonal cycle low was violated, which now puts a left-translated seasonal cycle at play in bonds. This also now points toward the October 27th low as having marked the last intermediate-term cycle low and that we also have a failed and left-translated intermediate-term cycle at play. More on this in the February letter. Short-term, Bonds should be nearing the trading cycle low.


Crude Oil

The price action on Thursday completed the formation of another daily swing low, but with the daily CTI still negative, the January 26th daily short-term sell signal remains intact. However, as a result of Thursday’s completion of a daily swing low, Crude Oil is structurally positioned for higher prices. Any further advance from here that turns the daily CTI back up will retrigger another short-term buy signal and any further weakness that carries price below the January 31st low will reconfirm the short-term sell signal. The expectation has been and continues to be that crude oil has been pushing into an intermediate-term and ideally a seasonal cycle top as should be the case with Equities and commodities in general. This short-term sell signal was/is an opportunity for these higher degree cycle tops to take hold, but we must see a short-term sell signal that is followed by the completion of a weekly swing high and downturn of the weekly CTI as evidence to that effect. A daily swing high will be completed on Friday if 65.83 is not bettered and if 64.63 is violated.


Natural Gas

I have again included a chart of Natural Gas, which obviously remains on a sell signal. As with Crude Oil and the overall Commodity Complex, the expectation has been that it too, was pushing into the higher degree intermediate-term cycle top and based on the continued weakness this appears to be the case. Knowing that Crude Oil and Natural Gas move to a very similar cyclical rhythm, Crude Oil should follow. The next step here with regard to the higher degree cycle tops will be the completion of a weekly swing high and down turn of the weekly CTI. That has not occurred this week because on Monday Natural Gas moved above last week’s high. Therefore, a weekly swing high cannot form this week.


Oil Service Index

I have also included a chart of the OSX again. The price action on Thursday completed the formation of another daily swing low, but as with Crude Oil the daily CTI remains negative and for that reason the short-term sell signal stands. Any further advance that turns the daily CTI up will trigger another short-term buy signal. However, as a result of the violation of what appears to have been the trading cycle low on January 19th, this should be a counter-trend advance that is followed by lower prices. Also, as a result of this week’s weekly swing high we now have an intermediate-term sell signal in the making and if nothing changes on Friday, this sell signal will become official, which also suggests that any bounce should be counter-trend. Bottom line with the energy complex, the evidence suggests that the higher degree cycle tops should be in the making, but we need to see the triggering of an intermediate-term sell signal in Crude Oil as evidence of such top.

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