Cycle Trading

Let’s begin the weekend report with the weekly dollar chart.

Since emerging from the three year low in 5/2011, the dollar trend has been up.
The current intermediate cycle peaked on week 13 and now sits at week 16.

A 13 week peak tends to shift the odds to this being a right translated weekly cycle.
And the expectation of a right translated weekly cycle would be to print a higher
low.

I also think that it is likely for the weekly low to print above the rising trend line.

There also stands the possibility that the new daily cycle that began on Tuesday also herald’s a new intermediate cycle.

I am watching to see if this new daily cycle breaks above 82.46 , which would form a weekly swing low.

I am also watching to see if there is a break on declining weekly trend line.

So here is a look of the daily cycles for the current intermediate cycle

This is either the 5 th daily cycle from the 2/29 intermediate cycle low, or the first daily cycle of a new IC.

The previous daily cycle was left translated but did not fail (break below the previous daily cycle low).

Here are the signals of an intermediate cycle low:
Timing Band – currently at week 16 — early
Left Translated daily Cycle —- check
Failed Daily Cycle —- no

So there exists the possibility of this new daily cycle also marking a new intermediate cycle.

As mentioned earlier, we are watching for a break above 82.46 that forms a weekly swing low.

Another thing to watch for is that left translated daily cycles typically peak by day 9.
If this is still part of the intermediate cycle off the 2/29 low then it should peak by next Friday.

On to the yearly cycle, 10 of the previous 11 yearly cycle ran 11 months or less.

The one outlier ran 17 months that included an extended sell off into a yearly cycle low.

Noticed that in about half of the yearly cycle have what I call a year end coil.

Here is a closer look of the current yearly cycle.

I believe that February hosted a yearly cycle low.
Because it was embedded in a year end coil, it went (almost) unnoticed.
Also notice how this pattern emerging out of the February yearly low looks very similar to the pattern that printed out of the three year low.

Stocks

The weekly cycle shows equities at week two of the new intermediate cycle.

Stocks hit a resistance level last week.
Intermediate cycles typically rally for at least 4 – 6 weeks even on left translated cycles.
Which gives us an expectation of equities putting in another leg higher.

The daily cycle shows equities on day 14.

Since this is the first daily cycle of a new intermediate cycle, the expectation is for this cycle to be right translated. That would mean seeing a daily cycle peak after day 18.
Stocks had a trend line break and a swing high this week.

Stocks are likely moving into a half cycle low that will sync up with the dollar.
If the dollar’s daily cycle is left translated and peaks in the coming week, equities will probably print a half cycle low and then make a run toward the 1400 level.

Stocks appear to be in the process of printing a yearly cycle low.

A break above 1364 forms a monthly swing low.
At 8 months it is on the early end for the timing band for a yearly cycle low.
But with a new intermediate cycle in the early stages, that increases the likelihood of June marking the yearly low.

This is a busy weekend, but

there is more to come.