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With each passing day, the dollar gets closer to the timing band for the next daily cycle low. And that cycle low will start to exert its pull on the dollar.
Wednesday was day 10 for the dollar’s daily cycle .
The dollar is starting to run out of time to make one more surge higher before declining into its next daily cycle low.
Currently the dollar has been consolidating and we have been waiting to see which way the dollar will break. And the way it breaks will likely determine how stocks will run.
Notice how the Schaff Trend Cycle is threatening to cross below the 75 line. A crossover has been a fairly reliable indicator that the dollar will break lower and move towards seeking out its daily cycle low.
Only twice in the last 29 times the Schaff Trend Cycle crossed below the 75 line has it failed to make it below to the 25 level.
Now, we discussed last night the possibility that equities printed an intermediate cycle low.
A weekly swing low would be another signal that an intermediate cycle has printed.
Still, I believe that at least a daily cycle low has been left behind.
Besides the declining trend line break and a swing low, here is another confirming indicator.
The True Strength Index has both a trend line break and a zero line crossover.
These are characteristic of price trending higher.
So, while stocks did give back a bit today, the equity cycle is early in the cycle count.
If the dollar rolls over soon, then I expect the equities to respond in a bullish way.
Having said that,
I will acknowledge that the Spanish Bond Auction could be “The Tell”.
If it is unsuccessful, that could cause a flight to the dollar and send equities correcting.
A successful auction would fit the bullish framework we discussed.
Just a reminder that I will soon be shifting operations over to
Cycle Trading 
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