Cycle Trading

Oil’s near 2% gain on the day signals that a new daily cycle is in hand.

After peaking on day 8, oil printed its lowest point last Tuesday, day 27. Oil has a wide timing band for a daily cycle low ranging from 30 days to 50 days. So it is quite possible that last Tuesday hosted a daily cycle low. Oil formed a swing low on Friday. A break of the declining trend line will confirm a new daily cycle. However, oil’s weekly cycle indicates that oil has started down a slippery slope.

Oil’s weekly cycle can run from 25 to 33 weeks. Currently the weekly cycle hosts a peak on week 7. A weekly swing high has formed as well as oil closing below the lower weekly cycle band. The close below the lower weekly cycle band along with the just printed failed daily cycle confirms an intermediate cycle decline. With another 8 to 16 weeks for oil to print an intermediate cycle low, we should see the new daily cycle form as a left translated cycle and fail, continuing the intermediate cycle decline.