The 8/18/17 Weekend Report


 
Summary:

Dollar:
The rally out of the early August low has been weak.

Stocks:
Stocks formed a lower low on Friday, extending the daily cycle decline.

Gold:
Friday’s bearish reversal indicate a daily cycle top.

Miners:
Friday’s bearish engulfing candle indicates a daily cycle top.

Oil:
Oil confirmed a new daily cycle on Friday. 

Bonds:
A new high on Friday, day 16, indicates a right translated cycle formation.

The Dollar
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We would like to see a close above the declining trend line for confirmation that day 50 hosted the DCL but so far the rally out of the day 50 low has been weak.

Friday was day 12 of the new daily cycle. A daily cycle trend line has formed and the dollar has already printed a swing high off the day 10 peak. A break below the daily cycle trend line would signal the daily cycle decline. The dollar is in a punishing daily downtrend. It will continue in its daily downtrend until it can close above the upper daily cycle band.

The dollar printed its lowest point on week 26, placing it in its timing band for an ICL. The dollar needs to at least close above the declining 10 week MA to signal that week 26 hosted the intermediate cycle low. Then a break of the declining weekly trend line would confirm the 26 ICL. The dollar continues to close below the lower weekly cycle band indicating that it is in a weekly downtrend. It will continue in its weekly downtrend until it can close above the upper weekly cycle band.

The dollar has been closing below the lower monthly cycle band, indicating the start of a monthly downtrend. August is month 15 for the yearly dollar cycle. That places the dollar late in its timing band to print a yearly cycle low. A monthly swing low is required to form a yearly cycle low. Since the dollar has printed a lower low in August the earliest a monthly swing low can form will be in September. The rising 50 month MA is in position to provide support for the dollar to form a YCL.


The dollar printed a failed yearly cycle low in May, 2016 to confirm the 3 year cycle decline. Then the dollar went on to printed a higher monthly high. Since a cycle cannot fail and then print a higher high, this confirms that May, 2016 was an early 3 year cycle low. That makes August, 2017 month 15 for the new 3 year cycle.

The dollar has now broke convincingly below the 3 year trend line and is closing below the lower monthly cycle band. This indicates the start of the 3 year cycle decline. If that is the case then the subsequent yearly cycles should form as left translated yearly cycles until the 3 year cycle low forms. And if the 3 year cycle decline has begun, then it is setting up as a left translated 3 year cycle. That aligns with our 15 year super cycle analysis.

The dollar cycles through a 15 year super cycle. Each 15 year super cycle is embedded with five 3 year cycles. The dollar’s last 15 year super cycle peaked in 2001 on month 106, then declined into its third 3 year cycle low. The topping pattern in 2001 is vary similar to the current set up. Currently, the dollar has printed a new high in January, which is month 105 for the 15 year super cycle. Which is about when the previous super cycle rolled over into its 15 year super cycle decline. At the previous super cycle peak the dollar was quite stretched above the 200 month MA as well as the 50 month MA — as it is was in January. There are bearish divergences developing on the momentum indicators that also appeared at the previous 15 year super cycle peak.

May, 2016 hosted the 3 year cycle low, which was a shortened 3 year cycle of only 24 months. Since most times cycle balances themselves out, we could be poised for the next 3 year cycle to be a stretched 3 year cycle just as the dollar is ready to begin its 15 year super cycle decline. And a stretched 3 year dollar cycle decline would align with gold beginning a new multi year bull cycle.

Stocks
stocks

Stocks formed a lower low on Friday, extending the daily cycle decline.

Friday was day 35 for the daily equity cycle, placing stocks in their timing band to print a daily cycle low. Friday’s narrow range day does ease the parameters for forming a swing low. A break above 2420.69 forms a daily swing low to signal a new daily cycle.

However, as we will see on the weekly chart, stocks formed a weekly swing high this week. Stocks maybe pulled lower by the gravitational pull of the impending ICL. A failed daily cycle would confirm the intermediate cycle decline. A break below their previous daily cycle low of 2405.70 will form a failed daily cycle.

At 41 weeks, stocks are very late in their timing band for an intermediate cycle decline. Stocks have delivered several signals that it is in the process of seeking out its intermediate cycle low:
* Stocks formed a weekly swing high
* Stocks closed below the lower daily cycle band.
* Stocks closed below the upper weekly cycle band.
* Stocks delivered a bearish zero line crossover on the weekly True Strength Indicator.

So, as previously mentioned, stocks need to break below the previous daily cycle low of 2405.70 in order to complete the intermediate cycle decline. Due to stocks being so late in their intermediate cycle I believe that any intermediate decline will be brief. Stocks remain firmly in a weekly up uptrend. They will continue in their weekly uptrend unless they close below the lower weekly cycle band.

Stocks broke out to a new high in August locking in a right translated yearly cycle formation. Stocks are deep in their timing band for seeking out their yearly cycle low. Since stocks printed a new high in August, the earliest a monthly swing high can form will be in September. A monthly swing high accompanied by a break of the monthly trend line will confirm the yearly cycle decline. At this point if an intermediate cycle decline is confirmed, it will likely signal the yearly cycle decline as well.

Gold

0 yellow metal

Gold printed a new high on Friday, day 29, indicating a right translated daily cycle formation.

Friday was day 29, placing gold in its timing band to seek out a daily cycle low. Friday’s bearish reversal eases the parameters for forming a daily swing high. A break below 1289.10 forms a daily swing high. Then a break below the daily cycle trend line will confirm the daily cycle decline. Gold continues to close above the upper daily cycle band indicating a daily uptrend. Gold will remain in its daily uptrend until it closes below the lower daily cycle band.

Closing above the upper weekly cycle band signals that week 9 hosted an early ICL. Since the decline into the week 9 low broke below the previous ICL, that means that gold formed a failed intermediate cycle low, which is a requirement for the yearly cycle decline. Closing above the upper weekly cycle band indicates that July hosted the yearly cycle low.

July was month 7 for the yearly gold cycle. Gold printed a bullish monthly reversal in July and has already form a monthly swing low in August. Gold has also broke above the declining monthly trend line. All of this points to July hosting the yearly cycle low. A close back above the upper monthly cycle band would establish a new monthly uptrend..

The Miners

0 miner surprise

After printing a 21 day half cycle low the Miners rallied into Friday,

Friday was day 29 for the daily Miner cycle. The new high on Friday indicates a right translated daily cycle formation. At 29 days, that places the Miners in its timing band for seeking its daily cycle low. Friday’s bearish engulfing candle eases the parameters for forming a daily swing high. A break below 22.87 forms a swing high. Then a break below the daily cycle trend line will confirm the daily cycle decline. The Miners have established a daily uptrend. They will remain in their daily uptrend until they close below the lower daily cycle band.

The right translated daily cycle formation along with establishing a daily uptrend indicate that week 10 hosted an early ICL. Still the Miners need to break above the declining weekly trend line to confirm that week 10 hosted an early ICL. If the daily cycle declines into a daily cycle low that will delay final confirmation that week 10 hosted the ICL.

The Miners yearly cycle is not in sync with gold’s yearly cycle. The Miners have been essentially crawling along the 50 month MA since breaking above it in June, 2016. August is month 8 for the Miners. So far, the Miners have printed their lowest point in May, which was month 5. That would be too early for a yearly cycle low. And since a cycle low is the lowest point following the cycle peak means that the Miners would need to break below the May low of 20.89 in order to complete its yearly cycle decline. But now that gold has closed above the upper weekly cycle band to signal that July hosted the yearly cycle low that probably means that the Miners left behind an early 5 month yearly cycle low. Which would make August month 3 of the new yearly cycle. A close above the upper monthly cycle band would indicate that the yearly cycle low has been set and that the Miners are re-establishing their monthly uptrend.

Oil

Oil formed a swing low on Friday to signal a new daily cycle.

After emerging form its yearly cycle low in June, oil tested and was rejected by the 50 day MA. But oil recovered and then continued to rally, peaking on day 27. The decline into the daily cycle low has now back-tested the 50 day MA and closed above the 10 day MA to confirm the new daily cycle. Oil is in a daily uptrend. It will remain in its daily uptrend until it closes below the lower daily cycle band.

I am confidant that week 31 hosted the ICL. Still, oil needs to break above the declining weekly trend line for confirmation. A close back above the upper weekly cycle band will provide confirmation that the yearly cycle low has also been left behind.

No yearly cycle has stretched past 15 months over the past 10 years. June was month 16 clearly placing oil late in its timing band to form a yearly cycle low. Oil has now formed a monthly swing low. A break above the declining monthly trend line confirms the new yearly cycle.

Bonds

Bonds broke out to a new high on Friday. At 16 days that shifts the odds towards a right translated cycle formation.

Bonds printed a bearish candle on Friday which eases the parameters for forming a daily swing high. 16 days does place bonds 2 days shy of their timing band for a daily cycle low. A break below 126.26 will form a swing high. Then a break of the daily cycle trend line will confirm the daily cycle decline. Bonds are in a daily uptrend. They will remain in their uptrend until they close below the lower daily cycle band. Therefore if bonds form their impending DCL above the lower daily cycle band they will remain in their daily uptrend.

This is week 6 for the weekly bond cycle & bonds back tested the 10 week MA. Bonds are in a weekly uptrend and will remain so until they close below the lower weekly cycle band.

Bonds formed a monthly swing high in July off the month 6 peak. But already in August bonds have broke above the July high, negating the swing high. A break above the month 6 high of 128.03 will shift the odds towards a right translated monthly cycle formation. Since the previous 2 yearly cycles stretched to 18 months, we need to be open to the possibility of another stretched yearly cycle. A close back above the upper monthly cycle band will re-establish the monthly uptrend.

Bonds continue to emerge from their 3 year cycle low, which printed in December. Once bonds decline into their yearly cycle low that will allow us to construct the 3 year trend line.

Likesmoney Cycle Tracker
As of 08/18/17

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