Cycle Trading

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I want to start out with the big picture for the dollar.

The dollar cycles through a 15 year super cycle.

The 15 year super cycle is embedded with five – 3 year cycles.

The 3 year cycles are embedded with weekly (intermediate cycles)
The intermediate cycles are embedded with daily cycles.

These 3 year cycles are best observed by looking at the monthly charts

The first two to three – 3 year cycles of a new 15 year cycle is very bullish for the dollar.

The dollar should be trending higher for the first 70-100 months of a super cycle.

Cyclically speaking this is a very bullish time for the dollar.
The dollar is in the second – 3 year cycle.

As noted above, the second three-year cycle should be wildly bullish.

The way that Ben hammered the dollar with QE 1&and 2 has caused the dollar to not print a higher three-year high in over ten years.

And it looks like we may be due for a yearly cycle low for the dollar.

The dollar is on Month 11 of the yearly cycle.

Over the past 12 years the dollar has been averaging 11 months between yearly cycle lows.

Now the dollar is on week 7 of the weekly cycle .

The current weekly cycle has printed a week 2 high

If the week two peak high remains the as the high, the weekly cycle the dollar should trend lower for the next 10 to 15 weeks.

That would lead to a failed weekly cycle, which is congruent for seeking out the yearly low.

The current daily cycle is on day 12 and looks to be threatening to print a failed daily cycle.

At day 12, the daily cycle should find its low in the next 4 to 14 days.

The current daily cycle has failed to print a higher daily cycle high.

If the current daily cycle fails, then the dollar will have changed character to lower highs and lower lows.

The dollar’s big picture seems to be emerging.

A potential failed daily cycle is hallmark of a weekly cycle in decline.

The weekly cycle in decline would then trigger the decline into the yearly cycle low.

Stocks

The Equity daily cycle has a few different interpretations to consider.

The equity daily cycle could have printed a shortened daily cycle at 24 days and we are now currently on day 8 of a new daily cycle.

Or

Friday was day 28 and there is a bear flag forming.

The SPY printed a noticeable 84 million on Selling on Strength.
In light of the recent volatility, this SOS could be meaningful.

The weekly cycle is currently in decline.

Equities show a clear trend line break on the weekly chart.
Last week shows a back test of the trend line.
A break above 1398 would form a weekly swing low.
Until there is a weekly swing low formed, the weekly cycle will remain in decline.

The yearly equity cycle stands at month 6.
We will need to keep an eye on how the current weekly cycle plays out.
If there is a steep correction and equities break below the October low, that would signal the yearly cycle in decline.
The weekly cycle will not to break below the October low unless there is a failed daily cycle.
The second daily cycle interpretation with Friday being day 28 would support this scenario

The CRB Index

The CRB forms a major low approximately every 33 Months

The last 3 year low was printed December, 2008

The CRB is due for another 3 year low.

It looked like the CRB printed a three year low back in October then went on to print a lower low in December.

It looks like the CRB is forming into a triple bottom

From chart notes:

“Prior Trend: With any reversal pattern, there should be an existing trend to reverse. In the case of the Triple Bottom Reversal, a clear downtrend should precede the formation.

Three Lows: All three lows should be reasonable equal, well spaced and mark significant turning points. The lows do not have to be exactly equal, but should be reasonably equivalent.

Resistance Break: As with many other reversal patterns, the Triple Bottom Reversal is not complete until a resistance breakout. The highest point of the formation, which would be the highest of the intermittent highs, marks resistance.

Resistance Turns Support: Broken resistance becomes potential support, and there is sometimes a test of this newfound support level with the first correction.”

The weekly chart has the CRB at 18 weeks and in its timing band to find its weekly cycle low.

The Miners

The last three yearly cycles ran 14-16 months

Currently the HUI is on month 10 with a 3 month peak.

We will not find a yearly cycle low, until we have a monthly swing low.

The HUI cannot print a monthly swing low, unless there is a new weekly cycle.

At Week 16 the HUI is in the timing band for a weekly low.

The current low for the cycle is on week 14.

In order to form a weekly swing low, the HUI would need to break above 485.

If the HUI could make one more push lower, that would ease the parameters to form a weekly swing low.

We may see a weekly low at the conclusion of the current daily cycle.

The daily cycle stands at day 11.

The Miners average 20 – 25 days for the daily cycle.
The current daily cycle appears to be consolidating the recent sell off.

It appears that the daily cycle is consolidating the sell off by trading sideways, the new daily cycle will likely also mark the new weekly cycle and, just maybe, a new yearly cycle.

There is a possible bullish signal with the Gold Miners Bullish Percent Index.

The BPGDM appears to be in the process of turning the corner.

Gold

Starting with the weekly chart.

Gold just printed week 16 of the weekly cycle
The weekly cycle sports a week 9 peak and so far the low point printed on week 14.

By definition, the weekly cycle low is the lowest point after the cycle high.

Either week 14 was the weekly cycle low or the weekly cycle low lies in front of us.

That means that we could see gold make one more flush below the week 14 low in order to print the weekly cycle low.

Gold has been caught in a series of lower weekly highs and lower weekly lows

If gold prints a low above the December low, that will break the pattern of lower lows.

There are several interpretations for Gold’s daily cycle.

Suffice it to say that a break above the declining trend line will signal a new daily cycle for gold.