Google, notes & crude

The Cycle Projection Oscillator (CPO) is a technical tool that employs proprietary statistical techniques and complex algorithms to filter multiple cycles from historical data, combines them to obtain cyclical information from price data and then gives a graphical representation of their productive behavior. Other proprietary frequency domain techniques then are employed to obtain the cycles embedded in the price.

Google (GOOG) appears to have hit a plateau this summer and has drifted sideways lower. The CPO is indicating that Google made a long-term bottom in mid-August and began a long-term uptrend. The CPO expects a minor correction in this rally by year end, but for Google to launch a much more significant uptrend in 2018. A sell-off in December could present a strong buying opportunity for Google before it begins a sharp rally that should last through the first quarter of 2018.

Despite the added volatility of an active hurricane season, crude oil has maintained a relatively stable range through the summer. The CPO is showing crude entering a soft patch that could challenge its June lows before bottoming out in mid-November. It then expects crude to turn higher by year end, potentially testing high in the mid-$50 level. However, the most dramatic action is expected in Q1 2018 when the CPO is calling for a strong sell-off that could challenge the $40 level.

The 10-year Treasury note future has held an impressive rally this summer, but the move has failed to regain the losses from the post-election sell-off last fall. In fact, despite the impressive rally, the 10-year has only gained in five months roughly half the ground it lost in the five-week post-election collapse. Now the CPO is predicting the end of the current rally, and in a big way. The CPO is forecasting a sharp sell-off in the 10-year that could challenge the post-election move. If it doesn’t by Halloween, it will have another chance in Q1 2018. The CPO is forecasting the 10-year to bottom in early November, followed by a strong rebound to finish the year and an even sharper down move in early 2018. A lot of opportunities as long as you time it right.