cycle turn indicator direction and swing summary …...intermediate-term cycle low in bonds...

Cycle Turn Indicator Direction and Swing Summary

of Select Markets as of the close on

February 21,2020

*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 Negative High Positive Low

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

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

Dollar Negative High Positive LowBonds Positive Low Positive Low

Crude Oil Positive High Positive LowUnleaded Negative High Positive Low

Natural Gas Negative High 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 23, 2020

Stocks

Tuesday’s short-term sell signal on the Industrials was confirmed with the lower close we were looking for on Friday and the price action this past week also triggered an intermediate-term sell signal, which in turn puts Equities at risk of the intermediate-term cycle top. At a higher level, we are at a cyclical juncture for the seasonal cycle top and if it proves here that we have in fact seen the intermediate-term cycle top, the higher degree cycle top/s should also prove to be in place as well. We also saw an intermediate-term sell signal on the NYSE World Leaders Index this past week and many of the leading indexes have re-triggered or remain on sell signals as well. Whether these higher degree cycle top/s bite here is now the test at hand and while we await the developments, the risk to Equities at this juncture is high.

Both Crude Oil and the CRB Index completed the formation of daily swing highs on Friday, but short-term sell signals were not triggered. Any further weakness that turns the Cycle Turn Indicators down will trigger short-term sell signals, which will then also mark an opportunity for the higher level intermediate-term cycle

End of Week Intermediate-Term Indicator Summary Intermediate-Term Sell/Neutral Primary Indicators Formation of a Weekly Swing High BearishCycle Turn Indicator (CTI) BearishCTI on Rydex Tempest Fund * BullishConfirming IndicatorsTrend Indicator (TI) BullishAdvance/Decline Issues Diff BearishNew High New Low Diff BearishSecondary Indicators

5 3 3 Stochastic BullishCycle Momentum Indicator Bearish*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)

Bearish

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


tops there as well. In the case of Crude Oil and the CRB Index, the higher degree seasonal cycle tops are in place, so upon the completion of intermediate-term sell signals, they will be repositioned to move lower in association with the higher degree cycles. The short-term buy signals on the XAU and Gold remain intact and higher prices continue. The evidence continues to be suggestive of this advance being in conjunction with an ending move into the 9-year cycle tops, but until intermediate-term sell signals are re-triggered, these latest signals will remain intact. The additional strength I wanted to see this week in the Dollar was seen and on Friday we saw the triggering of a short-term sell signal in association with the trading cycle top. The short-term focus now is the decline into the trading cycle low. The advance out of the trading and intermediate-term cycle low in Bonds continues pressing higher as rates are once again coming under pressure, which is exactly what we have been expecting. I also expect that this will force further rate cuts as the economic pressures mount.

The red intermediate-term Advancing issues line is tied to the intermediate-term cycle, which is now beginning to see increased weakness. The crossing below the MA lines was suggestive of a top, which has proven to have been the case and we now also have an intermediate-term sell signal in place.


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. The first of our Primary Short-Term Indicators is the New High/New Low Differential, plotted with price, which remains negative. The Trend Indicator turned down this past week, which is also suggestive of the trading cycle top and possibly the intermediate-term cycle top as well.


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 February 18th short-term sell signal was confirmed on Friday. All other factors aside, this short-term sell signal will remain intact until both a daily swing low and upturn of ALL Three of these indicators are seen. With this short-term sell signal having evolved into a higher degree intermediate-term sell signal, Equities are now also at risk of the intermediate and higher degree cycle top/s. But, we now need to see additional structural evidence of those higher degree cycle tops.


Both the Intermediate Term Volume Momentum Oscillator and the Intermediate Term Breadth Momentum Oscillator have turned below their trigger lines, which is suggestive of the trading cycle top, which at this juncture puts Equities at risk of the higher degree cycle top/s and again, it is now that confirmation that we must see.


Both the McClellan Summation Index and the McClellan Volume Summation Index have turned solidly in gear to the downside in association with the sell signals. The Ratio Adjusted McClellan Oscillator turned back down after having kissed the zero line, which is suggestive of lower prices in association with the short and intermediate-term sell signals.


The Smoothed McClellan Oscillator has crossed below its trigger line, which is also suggestive of the trading cycle top, which if proven to be the case, will be suggestive of the higher degree cycle top/s.


The Accumulation/Distribution Index continues to weaken, which serves to confirm the short-term sell signal, which is indicative of the trading and potentially the higher degree cycle cycle top/s as well.


Next is the weekly chart of our Leading Indicator, which began diverging once again back in mid-December and which turned back down this past week. The ongoing longer-term non-confirmation in conjunction with the 2018 top continues to be suggestive of this being an ending move into a higher degree cycle top and now the downturn out of the divergent top that began forming in December sets the stage for a turn here as does the continued downturn of the growth rate, plotted in the upper window. However, as explained in the February letter, the common trait with regard to confirmation of a top following the setup that is now trying to take form is the violation of a key previous indicator low. In the current case, I continue to think that a violation of the indicator’s June low, in conjunction with an intermediate-term sell signal, will be highly suggestive of a major top. For now, we have a downturn in association with a divergence and downturn of the growth rate, as well as an intermediate-term sell signal, which all continues to be a part of the setup for a possible turn. As I stated above, we are at a cyclical juncture and the setup here is taking form. Whether this can bite is about to be tested.


Our weekly chart of the Industrials is next. The intermediate-term cycle low was seen on January 31st and per the parameters given here in last weekend’s update, the price action this past week completed the formation of a weekly swing high that was confirmed by a downturn of the weekly CTI. In doing so, an intermediate-term sell signal was triggered, which puts the Industrials at risk of the intermediate-term cycle top, which if proven to be the case should coincide with the higher degree cycle top/s3313 We now have to see how well this signal bites and what the structural ramification are. In the interim we wait, but with the higher degree seasonal cycle top due and this intermediate-term sell signal in place, Equities are in a vulnerable position.


Gold

The short-term buy signal remains intact and higher prices have continued to follow. The last trading cycle proved to have bottomed on February 5th and the timing band for the next trading cycle low runs between March 3rd and March 17th. This trading cycle advance has carried price to overbought levels and the bettering of the January high was structurally positive for Gold. In addition, an intermediate-term buy signal was also triggered in Gold this past week. At the same time, the Industrial Metals Index non-confirmation continues to be a warning that Gold is pressing into the higher degree cycle tops. However, that aside, the short-term buy signal will remain intact until it is reversed. Also, until a weekly swing high and intermediate-term sell signal are re-triggered, the higher degree intermediate-term buy signal will also remain in force. Bottom line, the buy signals are what they are and higher prices will remain possible until both levels are reversed. However, within the context of this advance, the non-confirmation tells us that this advance is in association with the push into the higher degree cycle tops. 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 Monday if 1,652.10 is not bettered and if 1,621.60 is violated.

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

Primary Indicators

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

5 3 3 Stochastic Bullish

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. Thursday’s price reversal was conducive of a top, but Thursday’s low held and as with Gold, the advance continued on Friday. This advance has carried price to overbought levels, but until a daily swing high and downturn of the daily CTI are seen, a short-term sell signal will not be triggered. A daily swing high will be completed on Monday if 111.34 is not bettered and if 108.82 is violated.


Next is a chart of the Industrial Metals Index, which reversed off of its lows on Friday, but the short-term sell signal also remains intact. Any further advance on Monday that completes the formation of a daily swing low in association with an upturn of the daily CTI will trigger a short-term buy signal, but because of the higher level non-confirmation we are seeing, the evidence continues to warn of the advance in Gold being in association with the 9-year cycle top. However, until short and intermediate-term sell signals are re-triggered, that advance remains intact and should we see a short-term buy signal on this index, it could well give the advance in Gold added support. For this reason, we will keep a close eye on this index.


Next, I have included a monthly chart of the CRB with an overlay of Gold in red. This chart goes back to 1980 and it should be obvious that the cyclical rhythm is very similar. The timing of the corresponding tops and bottoms varies, as does the magnitude of the moves, but the basic rhythm is the same. So, while we currently have short and intermediate-term buy signals in Gold and the XAU, this non-confirmation and the known historical relationship between the CRB and Gold serves as an even stronger indication that the current advance in Gold and the XAU should be in association with the advance into the 9-year cycle top. Granted, we have seen evidence that this top first tried to peak in 2016. That top was then retested in 2017 and into April 2018, but then appeared to have failed. Then, coming out of the May 2019 intermediate-term cycle low, Gold has been able to clear those previous highs. As a result of the January intermediate-term sell signal Gold was once again in a position for this top to take hold, but it did not and as of this writing, the higher level advance remains intact. All the while, this non-confirmation is telling us that it should nonetheless be an ending move. Therefore, once an intermediate-term sell signal is triggered, the opportunity to cap this advance will again be at hand. If at that time a monthly swing high is completed, then odds will favor the higher degree seasonal cycle top. Bottom line, as long as the non-confirmation continues, the evidence is telling us that this is an ending move into the 9-year cycle top. But, at the same time, until we get a failed and/or left-translated intermediate-term cycle top in place, along with the completion of a monthly swing high, there is no structural evidence this top has been seen.


Our weekly chart of Gold is next. The intermediate-term buy signal on Gold was sloppy and the downturn of the oscillators at this level was suggestive of the intermediate-term cycle top. Therefore, while acknowledging the intermediate-term buy signal, I have been skeptical of the advance and have been labeling the intermediate-term indicator summaries neutral. The advance this week has further confirmed the intermediate-term buy signal and until a weekly swing high and downturn of the weekly CTI, plotted with price, are seen, an intermediate-term sell signal will not be triggered. Once another intermediate-term sell signal is triggered, the intermediate-term cycle top should be in place and the next key with regard to a higher degree cycle top will be the completion of a monthly swing high. The timing band for the next intermediate-term cycle low runs between March 6th and April 24th. A weekly swing high will be completed in the coming week if 1,652.10 is not bettered and if 1,581.80 is violated.


Dollar

Per the Thursday night update, we knew that the short-term oscillator picture had ripened for the trading cycle top and per the parameters given here Thursday night, the Dollar completed the formation of a daily swing high on Friday that was confirmed by a downturn of the daily CTI. In doing so a short-term sell signal was triggered and every indication is that the trading cycle top has been seen. The timing band for the next trading cycle low runs between February 26th and March 11th. We should now see continued weakness into this timing band as the oscillators move down from overbought levels. Then, once a daily swing low and upturn of the daily CTI are again seen, the trading cycle low should be in place and higher prices in association with the higher degree cycle lows are expected to follow. More on that once the trading cycle low is seen. For now, our focus is on the decline into that low.

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 Sell

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

Confirming IndicatorsTrend Indicator (TI) Bullish

Cycle Momentum Indicator BearishSecondary Indicators5 3 3 Stochastic Bearish


Our weekly Dollar chart is next. Pardon me for repeating the background, but it remains relevant. The timing band for the intermediate-term cycle low ran between October 18th and December 6th, but with the Dollar continuing lower into the December 31st trading cycle low, the evidence was initially suggestive of the intermediate-term cycle low having been seen on October 21st and that we had a failed and left-translated intermediate-term cycle at play in association with the decline into the December low. But, as we moved into the December low, we knew that the price/oscillator picture was hinting of the possibility of an early intermediate-term cycle low in association with the higher degree seasonal cycle low. Given the cyclical structure of the trading cycle advances that have followed in the wake of the December low, we began to give the Dollar the benefit of the doubt that this was the case. The first such evidence to this effect came with the completion of a weekly swing low, which was then followed by a right-translated trading cycle in association with the advance out of the December 31st trading cycle low. We now have a second right-translated trading cycle advance as well as a monthly swing low and the Dollar has also bettered its September seasonal cycle top. As a result, every indication is that the December low did in fact mark not only an early intermediate-term cycle low, but also the higher degree seasonal cycle low. The key now is the structure of this intermediate-term cycle advance, which I will discuss as this intermediate-term cycle progresses. I did not like the intra-week reversal seen this week, but, for now, the intermediate-term buy signal will remain intact until a weekly swing high and downturn of the weekly CTI, plotted with price, are seen. A weekly swing high will be completed in the coming week if 99.81 is not bettered and if 98.93 is violated.


Bonds

No change with bonds as the advance out of the February 6th trading cycle low continues moving higher. 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 and this past week we saw not only the February trading cycle top bettered, but also the October trading cycle top. Short-term, Bonds are approaching the timing band for the next trading cycle low, but ideally I would still like to see further strength into the coming week before the trading cycle top is seen. The expectation is for the decline into the next trading cycle low to be counter-trend and that higher prices in association with the higher degree cycle lows will follow. For now, the ongoing 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


Next is our weekly chart of Bonds. The intermediate-term cycle advance out of the January 2nd low remains intact. This should have also marked the higher degree seasonal cycle low, but we are still awaiting that confirmation. As a result of these higher degree cycle lows, the expectation has been for higher prices and a bettering of the previous trading cycle top, which we have seen. The next step with regard to the higher degree cycle lows is to see this intermediate-term cycle advance unfold with a right-translated structure. Bottom line, the intermediate-term advance will remain intact until a weekly swing high and downturn of the weekly CTI, plotted with price, are seen and the expectation is that the higher degree seasonal cycle low has also been seen.


Crude Oil

The price action on Friday completed the formation of a daily swing high, per the parameters given in the Thursday night update. Price reversed off of the lows and with the daily CTI not having turned down, a short-term sell signal was not triggered. Any further advance should be in association with an additional probe for the trading cycle top. On the other hand, any further weakness from here that turns the daily CTI down, in conjunction with a solid close below Friday’s low, will trigger a short-term sell signal, which will be suggestive of the trading cycle top. Because of the evidence of the higher level seasonal cycle top, the advance out of the February 4th low should prove to be a counter-trend advance within the context of that higher degree seasonal cycle top. Once a short-term sell signal is triggered, the opportunity to cap this counter-trend/intermediate-term advance will be at hand. The next step here is a solid close lower in association with a downturn of the daily CTI. A daily swing low will be completed on Monday if 52.55 holds and if 53.86 is bettered.


Our weekly chart of Crude Oil is next. Knowing the similar cyclical rhythm with Equities, we knew that it was possible the February 4th low also marked an intermediate-term cycle low and with the price action this past week having triggered a short-term buy signal, every indication is that it was. But again, because of the evidence of the higher level seasonal cycle top, the advance out of the February 4th low should nonetheless still prove to be a counter-trend advance within the context of the higher degree seasonal cycle top. The short-term price/oscillator picture is ripe for a short-term top and once a short-term sell signal it triggered, the first indication of this higher level intermediate-term cycle top will come with the completion of a weekly swing high. Ultimately, at this level, we have to see the completion of a weekly swing high and downturn of the weekly CTI in order to trigger an intermediate-term sell signal. Until then, while this advance is expected to be counter-trend, there is no evidence that it has run its course. I’ll have more on this once the short-term sell signal and decline into the trading cycle low takes hold.

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cycle turn indicator direction and swing summary …...intermediate-term cycle low in bonds...

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