Intermediate Cycle Low

November 19, 2012

As we discussed, it looks like the intermediate cycle low is in.

Stocks printed a daily swing low and this late in the timing band virtually guarantees this is the daily cycle low.

Notice the gold line 3 points above Monday’s close.
That represents the intra week high from last week. A break above that forms a weekly swing low. Then a break above the declining trend line confirms a new intermediate cycle.

There are some other signals that we can look for a new intermediate cycle
One of the things that we were looking for was a 90% up day.

We did get a 90% up volume day today.
Next we look for a follow through day of at least 1.5%

It is not uncommon to see stocks gain 6 – 10% in the first 2 weeks of a new intermediate cycle.

So far stocks are already up 3.2% off of Friday’s lows.

Gold formed a swing low off of Thursday’s print

The swing low confirms that gold has set the daily cycle trend line.

The Miners had a strong day up.

The Miners were up 2.68% on Monday
They easily formed a swing low and broke above the accelerated (gold) declining trend line for an initial level of confirmation of a new daily cycle.
A break above the (black) declining cycle trend line provides final confirmation of a new daily cycle.

And it is no coincident this happened on a day that the dollar formed a daily swing high.

Monday was day 23 for the dollar’s daily cycle
The dollar formed a swing high, which should mark the daily cycle peak.
A break below the daily cycle trend line will confirm the daily cycle decline in the dollar.

I would expect to see the dollar back test the break out level of 80.20 during this daily cycle decline.

So as the dollar continues to roll over, that should help risk asset go up …

10 responses to “Intermediate Cycle Low”

Jack Dog

November 19, 2012

Likesmoney,
We still need the Gold Swing for confirmation don’t we? Have an additional 35% to purchase some more tickets!
Great Weekend Report
Jack Dog

Reply
1. likesbullmarkets
  
  November 20, 2012
  
  do you mean a weekly gold swing?
  
  Reply
  1. likesmoneystudies
    
    November 20, 2012
    
    likesbullmarkets,
    
    I meant to reply to this from the weekend report but then never got back to it, sorry.
    
    “LM thanks again for your work
    So this dollar cycle is very right translated , That sets expectation that the next one will be right translated. Other pieces of the puzzle to factor in are
    1) equities are due to find there low
    2) and the dollar is hitting resistance at 81.50
    Are these two points enough to be expecting the dollar to be left translated the next cycle?”
    
    A right translated cycle sets the expectation for the next cycle to print a higher high, not necessarily form as right translated.
    Besides your two points listed, I also look at the yearly dollar cycle to form an expectation for the next daily cycle for the dollar to be left translated.
    
    A monthly swing high has formed and the dollar yearly cycle is now in decline.
    With the yearly cycle in decline, then all intermediate cycles going forward should from as left translated cycles until the yearly cycle low is printed.
    
    Of course, nothing is straight forward.
    Notice the September candle. September was month 7 for the dollar’s yearly cycle.
    Since September, the dollar has not made a lower monthly low, nor a higher monthly high.
    The dollar is still being contained by the declining yearly cycle trend line.
    
    In order for the yearly decline to still be in play, the dollar will need to print a lower monthly low.
    
    Should the dollar break above 81.66, that will form a monthly swing low off the September print and then that opens the possibility of a 7 month yearly cycle low printing in September.
    Only 1 time in the last 33 years has there been a 7 month yearly low printed, so the odds of this scenario are quite low.
    
    The bearish case for the dollar includes being contained by the aforementioned declining yearly cycle trend line.
    Also equities clearly printed an intermediate cycle low on Friday. (We are still awaiting some confirmations as discussed in Monday’s report)
    Equities emerging from an intermediate cycle low is congruent with the dollar forming an intermediate cycle top.
  2. Jack Dog
    
    November 20, 2012
    
    Yes, and LM replied, thanks.
2. likesmoneystudies
  
  November 20, 2012
  
  Jack Dog,
  
  You are correct, we still need to see a weekly swing low in gold form.
  Gold needs to break above 1738.6 to form the weekly swing gold.
  
  Reply
  1. Jack Dog
    
    November 20, 2012
    
    THANKS
chris

November 19, 2012

Thanks.

Chris

Reply
likesbullmarkets

November 20, 2012

LM. wow that was a big explanation . Thankyou for the effort . I certainly believe you are a great thinker/ writer .

Reply
vorfahrt

November 20, 2012

LM – thanks for your great reports. May I ask where you get the great info on Buying on Weakness and the 90% up volume day get from? -Thanks, Joe

Reply
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