Cycle Trading

That is what I think we saw the dollar do today.

Monday was day 8 for the dollar’s daily cycle. 
After the big sell off on Friday a little give back was to be expected.

It appears that the dollar back tested the daily cycle trend line.
We could see the dollar crawl up the trend line for a day or two

But I expect the dollar to continue lower into is daily and intermediate cycle low over the next 2 to 3 weeks.

The dollar’s expected decline into its intermediate low will likely cause the monthly dollar to form a swing high.

The dollar printed a yearly low in February.  That makes July month 5.

I am not saying that the top to the three year cycle is at hand or that the dollar will now begin plungining towards the yearly low.

However, a decline into a yearly or three year low cannot begin without a monthly swing.  Let’s keep our eyes on this …

The June ISM numbers came out today.

Both new orders and prices dropped dramatically. 
Yet the market seemed to be able to shrug off these numbers and a strong dollar and printed gains.

Besides the dollar, the CRB was also running into resistance at the 50 MA.
The CRB may spend a few days crawling along the 50 MA before resuming higher.

Equities also printed gains on Monday

So through the head winds from a higher dollar and poor ISM numbers equities were able to not only have a positive day, they also printed a new cycle high.

I believe that we will see risk on until the dollar finds its intermediate cycle low.