Markets Liquidity Cycle Reaches A Turn

By: Anthony_Cherniawski

It appears that FXE may be finished with its corrective bounce, or nearly so. There are a couple of ways to label this pattern and the chart shows the most conservative wave pattern. I am tempted to re-label, but we have time to evaluate what transpires over the next three weeks. Tomorrow is day 43 of the liquidity cycle and a turn date. Remember, I had mentioned that we have been seeing significant turns on or near dates divisible by 43. This may be one of them.

My apologies for calling for a pivot today. Indeed there is, but a lesser one. You may recall that I discussed the probability that SPY is now on the same Liquidity Cycle (dominant cycle) as FXE. Tomorrow is day 43 for SPY as well. The same discussion holds for SPY as FXE. We may expect a quick probe to 136.68, where wave 5 equals wave 1. Then a turn sometime during the day tomorrow.

It is uncertain whether VIX is attempting yet another decline, which may mean a new low. If it does make a new low, it appears to be in the form of a quadruple zigzag, which is virtually unheard of. On the other hand, the current wave structure is sloppy and overlapping, which leans more toward correctiveness than impulsiveness. If it chooses to go lower, the most likely support would be Cycle Bottom support at 15.98.

TLT made a nominal new high today. Today is day 26 (25.8) of its new Master Cycle, so if the new MC is dominant, we may have already seen the decline begin today. There is a lesser possibility of another move higher, but I remain neutral for TLT until clarity emerges.

I am convinced that TLT will come under the influence of the Liquidity Cycle very soon.

GLD appears to have one more probe to 155.46, where wave (v) of [c] equals wave (i) of [c]. GLD’s pivot day happens to be on Wednesday, but I would not be surprised to see an early turn, due to the influence of the Liquidity Cycle.

That’s all for now.

Tony

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