Cycle Trading

Stocks were down big today losing 2.37%.
Despite such a sell off, equities are closer to a bottom than a top.

The weekly equity cycle is currently in week 22. It is getting in the latter stages of the timing band to print an intermediate cycle low.

Recall on the weekend report we discussed that this correction has all of the characteristics of an intermediate cycle decline sans a failed daily cycle?

Well the SPX delivered the final confirmation of an intermediate cycle decline with today’s panic sell off that broke below the previous daily cycle low thus declaring a failed daily cycle.

I would not be surprised to see a narrow range day on Wednesday before a swing low is printed.

Wednesday will be day 45, which is the outer limit of the daily equity cycle.
Stocks are due to print a daily cycle low.

The good news is the next swing low will likely mark not only the daily cycle low, but an Intermediate cycle low, thus giving great clarity to our equity cycle counts.

The Buying on Strength numbers today suggest that the Big Boys are beginning to place their bets for the next run.

Gold also is indicating the market is about to turn.

We often see gold bottom before the general market and that is the case again.
Gold clearly bottomed on Monday and still managed to print a small gain Tuesday despite the panic sell of in the general market.

And like gold, we often see the Miners turn before the general market.

Normally the Miners loses would have been magnified on a day equities dropped over 2%.

Instead, the Miners tacked on a robust 1.83% signaling that the daily and very likely the intermediate cycle has printed a low on Monday.

Yes, the equity market is about to turn the corner.
Once that happens we will see gold and the Miners take off.

If you have jumped in early, then this is the time to hold them