Cycle Trading

The three lines through opposite points of tangency of any four mutually tangent spheres are coincident

Gold and miners formed swing lows last week.
Equities join the party forming a swing low today and the dollar forms a swing high … not a coincident …

Equities had a strong up day rallying 1.6% on 77% up volume.

It is very likely that equities are on day one of the new daily cycle.

It is also likely that this is a new intermediate cycle.

Now we need to see some confirmation.

A break of the descending trend line confirms a new daily cycle

Now, we need to see a follow through day, another strong rally day of at least 1.5% which is a confirmation day. These are often 90% up volume days also and rally at least 1.5%.

The average rally out of an intermediate cycle low is 6-10% in the first 8-13 days.

Every Intermediate Cycle for the last ten years managed to rally at least 4 weeks (except 1)

If stocks truly have formed a bottom, then it is likely that the dollar’s swing high printed today forms at least a daily cycle high.

Monday was day 14 for the dollar’s daily cycle.
It will enter its timing band for a low on Friday
The dollar’s timing band can extend to 25 days or more so the dollar can trend lower for the next 4 to 13 days.

Just a word of caution …
The SPY did print a mild SOS today.
That could signal some chop before this equity rally gains some traction.