SwingTrading with CyclesCycles Analysis 101
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 Cycles Report
Overview; TLDR If you haven’t already checked it out, I recommend you read the Cycles 101 Overview which will give you some important background to understand the details below. This first week of August was just consolidation after the big green weekly candle from the previous week. We did manage to make a new high on the weekly chart but then pulled back on Friday after the Jobs Report. This consolidation makes sense since the next CPI report is due Wednesday (8/10) morning. The market is l...
SwingTrading with CyclesWeekly SPX Cycle Report
TL;DR The pullback we all knew we needed has started. This is the daily cycle decline. Now we need to watch and see if the market can hold a higher low which is generally above the 4100 area. Overview The third week of August ended red as we reversed later in the week after making a new high on the weekly chart. We are 3 days into the start of the daily cycle decline so how this DCL forms will tell us a lot about what to expect on higher time frames. The Daily Cycle Friday was day 43 of the c...
Price action analysis of crypto, equities and commodities. I attempt to time the market using price action based cycles
SwingTrading with CyclesCycles Analysis 101
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 Cycles Report
Overview; TLDR If you haven’t already checked it out, I recommend you read the Cycles 101 Overview which will give you some important background to understand the details below. This first week of August was just consolidation after the big green weekly candle from the previous week. We did manage to make a new high on the weekly chart but then pulled back on Friday after the Jobs Report. This consolidation makes sense since the next CPI report is due Wednesday (8/10) morning. The market is l...
SwingTrading with CyclesWeekly SPX Cycle Report
TL;DR The pullback we all knew we needed has started. This is the daily cycle decline. Now we need to watch and see if the market can hold a higher low which is generally above the 4100 area. Overview The third week of August ended red as we reversed later in the week after making a new high on the weekly chart. We are 3 days into the start of the daily cycle decline so how this DCL forms will tell us a lot about what to expect on higher time frames. The Daily Cycle Friday was day 43 of the c...
Price action analysis of crypto, equities and commodities. I attempt to time the market using price action based cycles
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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 dur to the CPI release mentioned above. That would make this a failed daily cycle with a very early high. That would be the most bearish interpretation: that the new daily cycle has already topped out at day 4 and we are now declining into a daily cycle low which we wouldn’t expect for a few weeks given how long daily cycle usually last. Since we know we have the FOMC rate hike announcement next week we know that will serve as a big catalyst and it should offer up some clarity.
It’s possible that we are making an “extended” daily cycle low which in practical terms would just mean the DCL we thought we had on day 54 was not actually the DCL. This is something we will only know for sure in hindsight but we should be aware of the scenario to try to watch for signs that this is what is playing out. You can think of this as the most bullish interpretation and something many won’t be ready for as bearish macro news dominates the headlines.
In terms of the structure of the chart, the big down day on Sept 13 was a gap down which creates a natural target for any rallies. We know at some point we’re going to get a bounce even if it’s bound to end in a lower high and make a lower low. The gap area which is labeled on the chart below provides a good zone of interest to take profits and maybe even consider a short if we get a bounce this week.
Current Count: Day 8
Previous Daily Cycle Low: Day 25 (6/17/22)
Current DCH: Possible Day 4 (Sept 12)
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The Weekly Cycle
This past week was week 13 and we closed as bearish weekly outside candle. As a reminded, an outside candle is a candle that makes both a new high and a new low compared to the candle that precedes it. It’s bullish if the candle is green and bearish if it’s red. This is a very important price action signal as it’s a clear case of price rejection. If a candle makes a new low and then flips from red to green and proceeds to rally and make a new high that as an incredibly bullish signal. This is what happened the week of Sept 06. We closed with a bullish outside weekly candle but then followed that up with the exact opposite last week.
This is extreme volatility but the levels are also clear. This continues the downtrend on the weekly time frame as we have created another bearish weekly swing high in the process. This creates another supply zone/ceiling of resistance that must be contended with on the way back up. Most importantly, this is exactly the kind of price action we would expect if we were in the declining phase of the weekly cycle as we suspect. Next week is likely to begin with consolidation before we get the real fireworks with the FOMC announcement at 2pm on Sept 21
Current Week: 13
Previous Intermediate/Weekly Cycle Low: Week 16 (6/17/22)
Current ICH: Week 9 (8/15)
The Long Term (3 Year) Cycle
As of Friday’s close the September monthly candle is red again. While we may get a short term bounce, this is what you want to pay attention to. Are we red or green on these higher time frames. Also note that we remain below the low from August which means we are making new lows on the monthly chart. This indicates the monthly downtrend is back in control as we are making lower lows and lower highs. All of this points to the idea that this is month 30 of the 3 year cycle and we are in the declining phase. Just as we are in the declining phase of the weekly cycle, we are also declining in this long term cycle. That means even after we get our ICL for this weekly cycle we could expect another bearish weekly cycle after that which would take us into 2023.
Conclusion
Another big catalyst is incoming this week and is sure to cause a violent reaction at 2pm on Wednesday. That move will likely determine the fate of the market for the next 6-8 weeks as we either continue the decline into a weekly cycle low (ICL), or we see a violent bullish reversal that takes us to new weekly cycle highs. Either way there will be an opportunity to profit and I will be calling it in real time on Twitter so make sure to follow me there.
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 dur to the CPI release mentioned above. That would make this a failed daily cycle with a very early high. That would be the most bearish interpretation: that the new daily cycle has already topped out at day 4 and we are now declining into a daily cycle low which we wouldn’t expect for a few weeks given how long daily cycle usually last. Since we know we have the FOMC rate hike announcement next week we know that will serve as a big catalyst and it should offer up some clarity.
It’s possible that we are making an “extended” daily cycle low which in practical terms would just mean the DCL we thought we had on day 54 was not actually the DCL. This is something we will only know for sure in hindsight but we should be aware of the scenario to try to watch for signs that this is what is playing out. You can think of this as the most bullish interpretation and something many won’t be ready for as bearish macro news dominates the headlines.
In terms of the structure of the chart, the big down day on Sept 13 was a gap down which creates a natural target for any rallies. We know at some point we’re going to get a bounce even if it’s bound to end in a lower high and make a lower low. The gap area which is labeled on the chart below provides a good zone of interest to take profits and maybe even consider a short if we get a bounce this week.
Current Count: Day 8
Previous Daily Cycle Low: Day 25 (6/17/22)
Current DCH: Possible Day 4 (Sept 12)
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The Weekly Cycle
This past week was week 13 and we closed as bearish weekly outside candle. As a reminded, an outside candle is a candle that makes both a new high and a new low compared to the candle that precedes it. It’s bullish if the candle is green and bearish if it’s red. This is a very important price action signal as it’s a clear case of price rejection. If a candle makes a new low and then flips from red to green and proceeds to rally and make a new high that as an incredibly bullish signal. This is what happened the week of Sept 06. We closed with a bullish outside weekly candle but then followed that up with the exact opposite last week.
This is extreme volatility but the levels are also clear. This continues the downtrend on the weekly time frame as we have created another bearish weekly swing high in the process. This creates another supply zone/ceiling of resistance that must be contended with on the way back up. Most importantly, this is exactly the kind of price action we would expect if we were in the declining phase of the weekly cycle as we suspect. Next week is likely to begin with consolidation before we get the real fireworks with the FOMC announcement at 2pm on Sept 21
Current Week: 13
Previous Intermediate/Weekly Cycle Low: Week 16 (6/17/22)
Current ICH: Week 9 (8/15)
The Long Term (3 Year) Cycle
As of Friday’s close the September monthly candle is red again. While we may get a short term bounce, this is what you want to pay attention to. Are we red or green on these higher time frames. Also note that we remain below the low from August which means we are making new lows on the monthly chart. This indicates the monthly downtrend is back in control as we are making lower lows and lower highs. All of this points to the idea that this is month 30 of the 3 year cycle and we are in the declining phase. Just as we are in the declining phase of the weekly cycle, we are also declining in this long term cycle. That means even after we get our ICL for this weekly cycle we could expect another bearish weekly cycle after that which would take us into 2023.
Conclusion
Another big catalyst is incoming this week and is sure to cause a violent reaction at 2pm on Wednesday. That move will likely determine the fate of the market for the next 6-8 weeks as we either continue the decline into a weekly cycle low (ICL), or we see a violent bullish reversal that takes us to new weekly cycle highs. Either way there will be an opportunity to profit and I will be calling it in real time on Twitter so make sure to follow me there.
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