TL;DR
Massive sell signal. Ugly reaction to the Jackson Hole speech creates bearish weekly swing high suggesting the weekly cycle decline has started.
Overview
We knew this week would be important because we were set up for a weekly swing high based on how we closed the week of 8/15. The Friday sell off following the “hawkish” Jackson Hole speech delivers that weekly swing high with authority. In the process the monthly candle has gone from green to red with only a few trading days left. How we finish out this daily cycle is the most important piece of the puzzle so let’s get into it.
The Daily Cycle
Friday was day 48 of the current daily cycle and and as we know we’re late in the daily cycle but that doesn’t mean we can’t see a waterfall decline from here even as we would expect a daily cycle low to emerge at some point in the next week or two. At this point the next daily swing low is our possible DCL. Keep in mind we had a swing low as of 8/24 which looked like a daily cycle low in real time which failed when we made a new low on Friday (8/26) as discussed in this detailed video
Current Count: Day 49
Previous Daily Cycle Low: Day 54 (5/12/22)
Current DCH: Day 40
The Weekly Cycle
This past week was week 10 and we broke decisively below the previous week’s low which caused a bearish weekly swing high. This is very ominous assuming we don’t get a huge bullish reversal this coming week. The previous 2 weekly cycles have been relatively short at 16 and 20 weeks respectively. This suggests a longer weekly cycle this time around and if we are beginning the weekly cycle decline here on week 10, we have quite a bit of room to go in terms of downside since we would expect a weekly cycle of at least 20 weeks.
There is always a chance for a bullish reversal next week or even some consolidation that has the chance to resolve to the upside but the odds greatly favor more downside over the next few months and most importantly, suggests a red candle next month.
Current Week: 10
Previous Intermediate/Weekly Cycle Low: Week 16 (6/17/22)
Current ICH: Week 9 (8/15)
The Long Term (3 Year) Cycle
As mentioned last week, the key level for the monthly chart is 4112 which was the opening price. That means below that level, the monthly chart goes red and we begin to threaten making new lows. With the bearish action Friday we closed well below that 4112 level creating a red monthly candle and downside pressure going into September.
As mentioned, the way the daily cycle decline unfolds will determine how the monthly signals play out. We have just 3 trading days left for the monthly candle so we’re are set up to open September as an inside month as a best case scenario.
Conclusion
The price action indicates the beginning of the weekly cycle decline. This is a textbook sell signal on the weekly level so a fairly significant data point. Next week we will either see consolidation or follow through but if this signal is right, we are early in the weekly cycle decline so there’s no rush to go short as we would expect a multi-week decline from here.
TL;DR
Massive sell signal. Ugly reaction to the Jackson Hole speech creates bearish weekly swing high suggesting the weekly cycle decline has started.
Overview
We knew this week would be important because we were set up for a weekly swing high based on how we closed the week of 8/15. The Friday sell off following the “hawkish” Jackson Hole speech delivers that weekly swing high with authority. In the process the monthly candle has gone from green to red with only a few trading days left. How we finish out this daily cycle is the most important piece of the puzzle so let’s get into it.
The Daily Cycle
Friday was day 48 of the current daily cycle and and as we know we’re late in the daily cycle but that doesn’t mean we can’t see a waterfall decline from here even as we would expect a daily cycle low to emerge at some point in the next week or two. At this point the next daily swing low is our possible DCL. Keep in mind we had a swing low as of 8/24 which looked like a daily cycle low in real time which failed when we made a new low on Friday (8/26) as discussed in this detailed video
Current Count: Day 49
Previous Daily Cycle Low: Day 54 (5/12/22)
Current DCH: Day 40
The Weekly Cycle
This past week was week 10 and we broke decisively below the previous week’s low which caused a bearish weekly swing high. This is very ominous assuming we don’t get a huge bullish reversal this coming week. The previous 2 weekly cycles have been relatively short at 16 and 20 weeks respectively. This suggests a longer weekly cycle this time around and if we are beginning the weekly cycle decline here on week 10, we have quite a bit of room to go in terms of downside since we would expect a weekly cycle of at least 20 weeks.
There is always a chance for a bullish reversal next week or even some consolidation that has the chance to resolve to the upside but the odds greatly favor more downside over the next few months and most importantly, suggests a red candle next month.
Current Week: 10
Previous Intermediate/Weekly Cycle Low: Week 16 (6/17/22)
Current ICH: Week 9 (8/15)
The Long Term (3 Year) Cycle
As mentioned last week, the key level for the monthly chart is 4112 which was the opening price. That means below that level, the monthly chart goes red and we begin to threaten making new lows. With the bearish action Friday we closed well below that 4112 level creating a red monthly candle and downside pressure going into September.
As mentioned, the way the daily cycle decline unfolds will determine how the monthly signals play out. We have just 3 trading days left for the monthly candle so we’re are set up to open September as an inside month as a best case scenario.
Conclusion
The price action indicates the beginning of the weekly cycle decline. This is a textbook sell signal on the weekly level so a fairly significant data point. Next week we will either see consolidation or follow through but if this signal is right, we are early in the weekly cycle decline so there’s no rush to go short as we would expect a multi-week decline from here.
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Overview I use cycles as a way to better quantify trend analysis and turn it into actionable insights. When I look at cycles I focus 100% on price action. Cycles help to explain the price action, not the other way around. I don’t believe there is any outside force controlling the price action to make it conform to certain timing bands as other analysts seem to think. This is why I don’t rely on knowing when an asset is “supposed” to have a certain cycle low. To identify those turning points I...
SwingTrading with CyclesWeekly SPX Cycle Report
TL;DR The market reacted negatively to the CPI release on Tuesday (Sept 13), causing a massive bearish daily swing high which creates a bearish weekly swing high in the process. This is further evidence that we are in the declining phase of the weekly cycle and also the declining phase of the long term (3 year) cycle. The Daily Cycle Friday was day 8 of the daily cycle and we made a new low below the day 54 low which we are marking as our previous DCL. We also have a big swing high on day 4 d...
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Price action analysis of crypto, equities and commodities. I attempt to time the market using price action based cycles
Price action analysis of crypto, equities and commodities. I attempt to time the market using price action based cycles
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