Cycle Trading

The dollar printed a key reversal on Friday, which was day 22 of the dollar’s daily cycle.

I mentioned on Monday’s report that the Job’s number on Friday may be the catalyst for a swing on the dollar and that looks to be the case.
The dollar is getting late in its daily cycle and this key reversal should mark the cycle top.
A break below 82.63 forms a swing high.
Once a swing high is formed, a break below the cycle trend line confirms a daily cycle in decline.

A likely scenario would be for the dollar to find its daily cycle low over the next week printing a higher low. And then the new daily cycle peaking within the first 10 days forming a left translated daily cycle.

Since the dollar will enter day 23 on Monday, I do not anticipate a lengthy decline simply because there is not that many days left in the daily cycle

As we discussed on Wednesday, this is week 13 of the intermediate cycle.

With the daily cycle potentially in decline a break below 81.83 forms a weekly swing high, which is just 0.80 below the point needed to form a daily swing high.
A break below the accelerated weekly trend line would confirm a weekly cycle in decline.
The dollar typically prints an intermediate cycle low every 13 – 23 weeks. This suggests that the current weekly cycle may last another 2 – 10 more weeks.

The next daily cycle would take the dollar to about week 19 or 20, which is right in the timing for an intermediate cycle low.

June begins a new month and I believe that this will be month 4 of the dollar yearly cycle.

I believe that the dollar printed a shallow “stealth” yearly low in February.

Supportive of this is that prior to May the monthly dollar was coiling.
This coiling on a monthly basis is characteristic of yearly cycle lows.

So that makes June month 4 of the new yearly cycle.
If the weekly cycle does begin to decline into its intermediate cycle low, that could take around two months. Which might make June the cycle top of the current yearly cycle.

Stocks

We discussed last week how stocks formed a swing low.

We also looked at on Monday how over half a billion had been printed on the selling on strength the previous week for the SPY. That was a clear signal that there was still significant selling pressure.
It turns out that last weeks swing low set the declining cycle trend line and the daily cycle low is still out in front of us. The daily cycle low will be re-phased to likely the next swing low.

I will be watching the Buying on Weakness numbers to see if we start to get a large print to signal the Big Boys are stepping in to buy.

Regardless of when the Big Boys begin to step in to buy, the earliest a weekly swing low can form is next week and more likely not until the week after.
A break above 1335 is needed to form a weekly swing low. A more likely scenario will be for equities to print a lower low this week

Friday was June first and it ushered in a new month on the yearly cycle.

As we have been chronicling, equities are embraced in a yearly cycle decline.
June takes the yearly cycle to month 8 and the third straight monthly lower low.
Over the past 15 years equities have not printed 3 monthly lower lows without it marking a yearly cycle low.

A decline into the yearly cycle low can be a nasty affair. If the October low is taken out, then that would clearly signal that equities have embarked seeking their 4 year low.

Gold

Friday was a game change for gold.

By 7:30 word must have leaked out about the jobs number because the party had begun.

It is interesting to compare this to the timing of the dollar selling off.

The dollar spiked at 7:45 and the selling began in earnest around 8:00.

So day 11 for gold showed a clear and convincing bullish break out of consolidation.
In a bull market surprises come to the upside and the 64 handle break out certainly qualifies as one.

Prior to Friday, gold’s daily cycle peak was day 3 and was in danger of forming as left translated. Which would mean the gold is still printing lower highs and lower lows.

Friday shifted the odds of this being a right translated daily cycle. Which is what we would expect for the first daily cycle of a new intermediate cycle.

Yet we still await confirmation of a new intermediate cycle.

Gold formed a weekly swing low last week.
Even though gold had that monster day on Friday, a break of the declining cycle trend line is needed to confirm a new weekly cycle.
That confirmation will likely happen on Monday.
Since last week was in all likelihood week 2, which would mean gold could trend higher for the next 12 to 15 weeks.

And a new intermediate cycle will likely mark a new yearly cycle as well.

June will likely mark month 1 of the new yearly cycle

The Miners

The Miners demonstrated some incredible bullishness last week.

Despite the dollar’s historic run, the Miners held the daily cycle trend line.

The Miners printed day 11 on Friday, along with gold.
The Miners daily cycle can run from 14 to 26 days.
Should the dollar find its daily cycle low by Friday or early next week, that will likely coincide with the Miners (and gold) printing a daily swing high.

If you are seeking a good entry, you can jump in now and chase – realizing that a daily cycle low is on the horizon. Or you can wait for the next daily cycle low to print.

As you will see with the next chart, the intermediate cycle is still early and any timing error should be quickly corrected.

Week 2 left behind a bullish tail and a clear and convincing trend line break.

Stocks had a horrible week.
The dollar ran strong through Friday before printing a key reversal.
The Miners held strong and confirmed a new intermediate cycle.
This is all very bullish.

The Miners have yet to confirm a new yearly cycle.

A break above 449.04 forms a monthly swing low.
With both a new daily cycle and now a confirmed intermediate cycle in hand, confirmation of a new yearly cycle will likely print this week.
This should also mark the 3 year low for the miners.
By the way, the Miners ran 244 % off the last 3 year low …

See you at …