Cycle Trading

Tuesday was day 24 for the dollar’s daily cycle.
The dollar is starting to move into the later stages of the timing band to find its low.

The dollar did break the cycle trend line signaling a decline into the daily cycle low.
Since the daily cycle is getting late, I expect a brief decline into a daily cycle low.

Then say the dollar finds its daily cycle low later this week or early next week and begins a new daily cycle that lasts about 5 weeks. This new daily cycle would take the intermediate cycle right to about 19 – 20 weeks, which is in the timing band to print an intermediate cycle low.

That would make this next dollar daily cycle the last daily cycle of the weekly cycle. Last daily cycles are characterized by being left translated, failed daily cycles. The expectation of a failed daily cycle is to peak by day 10, usually sooner.
So we could see a brief decline followed by a brief rally and then a decline into an intermediate cycle low for the dollar some 6 weeks from now.

What does that mean for the miners?

First a quick look back to 2008:
The first two intermediate cycles out of the 2008 three year low for the miners consisted of 7 daily cycles. The first 5 daily cycles were right translated cycles that peaked on the average at 16 days.

The Miners are currently rallying out of another 3 year low.

Tuesday was day 13 for the Miners.

We see that they are fast approaching resistance at the 460 level.

There is a possibility that the resistance at 460 could coincide with the dollar finding its bottom.

That could send the Miners correcting as the dollar embarks on the final daily cycle of its current intermediate cycle.

The expectation of a brief dollar rally followed by a decline into an intermediate cycle low could translate into a brief decline for the miners followed by a vigorous rally.

Equities did form a swing low today.

A break of the (red) accelerated trend line would provide a confirmation of a new daily cycle. The break of the dark trend line would provide final confirmation of a new daily cycle.
Even though a swing low was printed, there are some head winds for equities.
The swing low was capped by the 200 MA.
The SPY did top the Selling on Strength list today.
So while a swing low was formed, there was not confirmation.
A scenario of the dollar finding its daily cycle bottom prior to confirmation of a new equity daily cycle would add to those headwinds.