Cycle Turn Indicator Direction and Swing Summary of Select ... · Cycle Turn Indicator and the New...

Cycle Turn Indicator Direction and Swing Summary

of Select Markets as of the close on

February 20,2020

*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

Market Daily CTI

Daily Swing

Weekly CTI

Weekly Swing

Industrial Negative High Negative HighTransports Positive Low Negative Low

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

CRB Index Positive Low Positive LowGold Positive Low Positive LowXAU Positive Low Positive Low

Dollar Positive Low Positive LowBonds Positive Low Positive Low

Crude Oil Positive Low Positive LowUnleaded Positive Low Positive Low

Natural Gas Positive Low Positive Low

© Copyright 2020 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.


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

February 20, 2020

Stocks

Tuesday’s short-term sell signal on the Industrials remains intact and on Thursday we saw a violation of Tuesday’s low. But, because of the completion of a daily swing low on Wednesday and the price reversal off of the lows once again on Thursday, we have not seen sufficient confirmation of Tuesday’s short-term sell signal. As additional confirmation, we need to see a solid close below Thursday’s low. Until that happens, this sell signal has to be viewed with a cautionary eye. At a higher level, there is no doubt that we remain at a cyclical juncture for the seasonal cycle top or that this short-term sell signal is an opportunity for that top. However, until we see whether something more can take hold in the wake of this short-term sell signal, while we know this higher degree cycle top is due and the risks in association with that top are high, there is no evidence it has been seen.

End of Week Intermediate-Term Indicator Summary Intermediate-Term Neutral Primary Indicators Formation of a Weekly Swing Low BullishCycle Turn Indicator (CTI) BullishCTI on Rydex Tempest Fund * BearishConfirming IndicatorsTrend Indicator (TI) BullishAdvance/Decline Issues Diff BullishNew High New Low Diff BullishSecondary Indicators

5 3 3 Stochastic BullishCycle Momentum Indicator Bullish*When this indicator is Bullish it is negative for the market and visa versa.

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

Bearish

McClellan Intermediate Term Volume Momentum Oscillator (ITVM)

Bullish

McClellan Summation Index BearishMcClellan Volume Summation Index Bearish

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

Bearish

Accumulation/Distribution Index Bearish


No changes with Crude Oil or the CRB. The short-term buy signals on both Crude Oil and the CRB Index remain intact, but because of the evidence with regard to the higher level seasonal cycle top, these advances are expected to be counter-trend. The short-term buy signals on the XAU and Gold remain intact. Gold’s advance above its January trading cycle top was structurally positive, but the XAU reversed lower and I continue to think that both are pressing into their higher degree cycle tops, per the ongoing non-confirmation of the Industrial Metals Index. The additional strength I wanted to see this week in the Dollar has been realized as it continues pressing into its trading cycle top and the resulting evidence continues to be further suggestive of the December low having marked the higher level seasonal cycle low. Tuesday’s short-term buy signal in Bonds left them positioned for higher prices, which we are seeing.

The red intermediate-term Advancing issues line is tied to the intermediate-term cycle and so far, we have only seen a slow erosion. The crossing last week below the MA lines was suggestive of a top and we now have another short-term sell signal. But, we still have to see whether it can morph into an intermediate-term sell signal. If so, then the evidence at that time will be suggestive of an intermediate-term cycle top, which will consequently be suggestive of the higher degree seasonal cycle top. The first step was the short-term sell signal, which we have, but we also still need to see it confirmed.


The Trading Cycle Oscillator in the upper window remains below its trigger line. The Momentum indicator, which is also plotted in the upper window, remains below its zero line. The 5 3 3 stochastic in the middle window also continues turning down from overbought levels. The behavior of these three indicators has been and continues to be suggestive of a top and thus far we are hanging on to a marginal short-term sell signal. 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 marginally below its trigger line.


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, Tuesday’s short-term sell signal remains questionable because we have yet to see a solid close lower to confirm it. However, this signal, as marginal as it is, will remain intact until a daily swing low and upturn of ALL Three of these indicators is seen. What develops in the wake of this short-term sell signal remains our focus. I will have more in the weekend update.


The Intermediate Term Volume Momentum Oscillator remains right on its trigger line. The Intermediate Term Breadth Momentum Oscillator remains just below its trigger lines. A downturn by both and a move below their previous lows should serve as evidence of the trading cycle top.


Both the McClellan Summation Index and the McClellan Volume Summation Index have ticked slightly lower. The Ratio Adjusted McClellan Oscillator turned back up and is now kissing the zero line from below. A cross back above the trigger lines will make this indicator positive once again as we us it, whereas another downturn in association with a price break and solid close below Thursday’s low should serve to confirm the short-term sell signal, which will be suggestive of the trading cycle top.


The Smoothed McClellan Oscillator is sitting right on its trigger line. Another downturn here in conjunction with a price close below Thursday’s low will be suggestive of the trading cycle top.


The Accumulation/Distribution Index has ticked back down. Here too, any further weakness in conjunction with a price close below Thursday’s low will serve to confirm the short-term sell signal, which will in turn be indicative of the trading cycle top.


Gold

The short-term buy signal from last week remains intact, which has now led to a bettering of the January trading cycle top. With the timing band for the current trading cycle low running between February 10th and February 24th, as mentioned previously, this is now also suggestive of the February 5th daily swing low having marked an early trading cycle low. This only serves to change the cyclical phasing of the trading cycle in that the timing band for the next trading cycle low now runs between March 3rd and March 17th. As for the structure of Gold, the bettering of the January high is obviously positive for Gold itself, the Industrial Metals Index continues to weaken, which in doing so continues telling us that the advance in Gold should be an ending move into the higher degree cycle tops. With that said, the short-term buy signal will remain intact until it is reversed and if nothing changes on Friday, we will have another intermediate-term buy signal on Gold. While we must respect the intermediate-term buy signal, we must also respect the non-confirmation by the Industrial Metal Index. Bottom line, the signals stand on their own, but because of the non-confirmation, I have to also continue to conclude that this advance is in association with the push into the higher degree cycle tops. More on this in the weekend update. For now, the short-term buy signal will remain intact until a daily swing high and downturn of the daily CTI are seen. Another daily swing high will be completed on Friday if 1,626.50 is not bettered and if 1,606.60 is violated.

End of Week Intermediate-Term Indicator Summary Intermediate-Term Neutral

Primary Indicators

Formation of a Weekly Swing Low BullishCycle Turn Indicator (CTI) BearishConfirming IndicatorsTrend Indicator (TI) BullishCycle Momentum Indicator BearishSecondary Indicators

5 3 3 Stochastic Bearish

Daily Indicator SummaryShort-Term Buy

Primary Indicators

Formation of a Daily Swing Low BullishCycle Turn Indicator (CTI) BullishConfirming IndicatorsTrend Indicator (TI) BullishCycle Momentum Indicator BullishSecondary Short Term Indicators

5 3 3 Stochastic Bullish


Our daily chart of the XAU is next and as with Gold, the retest of the higher degree intermediate-term cycle top has continued. On Thursday the XAU reversed lower after bettering its January high. The price/oscillator picture here is conducive of a top and once a daily swing high and downturn of the daily CTI are seen, a short-term sell signal will be triggered and this top should be in place. A daily swing high will be completed on Friday if 109.67 is not bettered and if 107.20 is violated.


Next is a chart of the Industrial Metals Index, which has not confirmed the February advance in either Gold or the XAU. I have shown you the importance of such non-confirmations in association with previous 4-year cycle tops, but until another short-term sell signal is re-triggered in Gold and now another weekly swing high and intermediate-term sell signal are re-formed, the probe for the higher degree cycle tops will continue.


Dollar

In the weekend update and again in the Tuesday night update I said that ideally I wanted to see further strength into this week in conjunction with the trading cycle advance, which is exactly what we have seen. As a result, this trading cycle advance has become right-translated and every indication is that the December 31st trading cycle low not only marked an early intermediate-term cycle low, but that it also marked the seasonal cycle low. Short-term, the oscillator picture is definitely ripe for the trading cycle top and once a daily swing high is formed and confirmed by a downturn of the daily CTI, that top should be in place. Until such time, higher prices will remain possible. A daily swing high will be completed on Friday if 99.81 is not bettered and if 99.44 is violated. Once the trading cycle top is seen, the decline into the trading cycle low should be counter-trend.

End of Week Intermediate-Term Indicator Summary Intermediate-Term Buy

Primary Indicators Formation of a Weekly Swing Low BullishCycle Turn Indicator (CTI) Bullish

Confirming IndicatorsTrend Indicator (TI) Bullish

Cycle Momentum Indicator BullishSecondary Indicators5 3 3 Stochastic Bullish

Daily Indicator SummaryShort-Term Buy

Primary Indicators Formation of a Daily Swing Low BullishCycle Turn Indicator (CTI) Bullish

Confirming IndicatorsTrend Indicator (TI) Bullish

Cycle Momentum Indicator BullishSecondary Indicators5 3 3 Stochastic Bullish


Bonds

The advance out of the February 6th trading cycle low remains intact and the previous trading cycle top has now been bettered. We know that the January 2nd trading cycle low also marked the higher degree intermediate-term and what we have known should ideally also be the seasonal cycle low. Because of these higher degree cycle lows, the expectation has been for higher prices, which is now proving correct. Ultimately we still need to see this trading cycle unfold with a right-translated structure, but the expectation is that it will. The ongoing short and intermediate-term buy signals remain intact and higher prices into the next trading cycle top are expected. The short-term buy signal will remain intact until another daily swing high AND downturn of the daily CTI are seen.

End of Week Intermediate-Term Indicator Summary Intermediate-Term BuyPrimary Indicators Formation of a Weekly Swing Low BullishCycle Turn Indicator (CTI) BullishConfirming IndicatorsTrend Indicator (TI) BullishCycle Momentum Indicator BullishSecondary Indicators5 3 3 Stochastic Bearish

Daily Indicator SummaryShort-Term BuyPrimary Indicators Formation of a Daily Swing Low BullishCycle Turn Indicator (CTI) BullishConfirming IndicatorsTrend Indicator (TI) BullishCycle Momentum Indicator BullishSecondary Short Term Indicators5 3 3 Stochastic Bullish


Crude Oil

The February 5th short-term buy signal and advance out of the trading cycle low remains intact and as with Equities, there is now evidence that is also marked the intermediate-term cycle low. Knowing the similar cyclical rhythm with Equities, this was pretty well expected, but we had to see structural proof, which we now have. However, as I have also explained, because of the evidence of the higher level seasonal cycle top, this should, nonetheless, prove to be a counter-trend advance within the context of the higher degree seasonal cycle top. In the meantime, this short-term buy signal will continue to remain intact until another daily swing high and downturn of the daily CTI are seen. A daily swing high will be completed on Friday if 54.50 is not bettered and if 53.22 is violated.

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