Cycle Trading

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… tends to stay in motion unless acted on by an outside force

A correction was overdue. The last weekly cycle low occurred 30 weeks ago.

Stocks began their sell off on Tuesday, April 3 rd and have sold off for 15 days.

Stocks will remain in a sell off until they form a daily cycle low and have a break of the declining cycle trend line.

Technically, there was a swing low formed off the day 24 candle.
Stocks bounced but did not break above the declining cycle trend line, so equities remain in a sell off.

Right now there is some uncertainty if this is just a daily cycle correction or an intermediate cycle correction.

In the weekend report we discussed how equities have broke below the weekly cycle trend line.
A breach of the prior daily cycle low, which was March 6, would confirm this as an intermediate cycle correction.

I suspect that we will see stocks make one more push lower, printing a new cycle low below the March 6 level.

Right now, as equities correct, there is a classic battle going on between the dollar bulls and dollar bears.

The Bullish case for the dollar:

– Uptrend since September
– Month 49 of the current Super Cycle and we discussed in the Weekend Report that to first 70 – 100 months of the Super Cycle should be Bullish

The Bearish case for the dollar:

– Rejection by the 80 level
– Printing lower highs since January
– Dollar currently in the grips of a daily cycle decline
– The Schaff Trend Cycle crossed below the 25 level – bearish for the dollar.
– The dollar is due to seek out its yearly cycle low
– Printing lower 3-year highs since 2000.

Something that comes to mind,
whenever Ben has a problem with the dollar he just reaches into his tool box.

And we saw him hammer the dollar in 2009 & in 2010

When your only tool in the toolbox is a hammer,
then all problems begin to look like …