Pre-Summary
In our July 13 article, we discussed Oil as it reclaimed the 50-week moving average and outlined the evidence needed to identify the next Intermediate Cycle Low. Since then, Oil has reclaimed the 10-week moving average and is beginning to find support above it, but a weekly close above the 10-week moving average is still needed to signal the Intermediate Cycle Low.
We discussed Oil previously as it reclaimed the 50-week moving average and explained why that represented an important step toward identifying the next Intermediate Cycle Low. Since then, Oil has continued to improve, reclaiming the declining 10-week moving average and beginning to find support above it.
While this is an encouraging development, the process is not yet complete. At the time of this writing, the trading week remains open. Under our methodology, an Intermediate Cycle Low is signaled only after a weekly swing low forms and Oil closes the week above the 10-week moving average.
The focus now shifts to the weekly close. Holding above the 10-week moving average would provide the additional evidence needed to signal Week 28 as the Intermediate Cycle Low. Until then, Oil continues building evidence, but the signal has not yet been given.
Cycle Study
One of the strengths of cycle analysis is allowing the market to complete each step before drawing conclusions.
Reclaiming the 10-week moving average is an important milestone, but it is only one part of the process. The Intermediate Cycle Low is signaled only after a weekly swing low forms and the market closes the week above the 10-week moving average.
By waiting for both conditions to occur, cycle analysis remains evidence-based rather than anticipatory.
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