Cycle Trading

Last Friday when the dollar tanked, that fit in with my framework of the dollar being in the
5 th daily cycle and ready to seek out an intermediate cycle low.

This week’s bullish reversal on the dollar has compelled me to reexamine “the facts”.
The dollar set a new daily cycle high on day 13, increasing the odds that this cycle will print as right translated. That also suggests that the dollar may “need” one more daily cycle that is left translated, to seek out its intermediate cycle low.

So let’s look back to the start of the current three year cycle and spot the failed daily cycles.

The red arrow marks the three year low and the black arrows mark the failed daily cycles.

Notice the failed daily cycles marked (a) & (b).

The failed daily cycle following the yearly cycle peak marks the yearly cycle low (a), as well as an intermediate and daily cycle low.

The (b) failed daily cycle low is just 9 short weeks away from the (a) failed daily cycle low.

I have not seen a 9 week intermediate cycle before, but I have seen a failed daily cycle not printing an intermediate cycle low.

That is why I did not label (b) as an intermediate cycle low and viewed the current daily cycle at week 18.

So I relabeled the weekly chart syncing up the failed daily cycles with intermediate cycle lows, regardless of timing bands.

That gives us the intermediate cycle following the yearly cycle low (b) is just 9 weeks.

But, that would now make this week week 9, not week 18. A right translated daily cycle during week 9 is common whereas a right translated daily cycle at week 18 is not the norm.

July is month 5 of the dollar yearly cycle.
The currently monthly cycle high is June.

This year’s cycle seems to be almost a carbon copy (Xerox) of the previous yearly cycle.
• Both cycles begin with the yearly cycle low followed by some coiling.
• The coiling was followed by a very bullish break out.
• The breakout was followed by a 2 month consolidation.
While this analogue is interesting, it may not be predictive.
For now, I am watching for a monthly swing high.
A decline into a yearly cycle low cannot begin with out a monthly swing high.

Stocks

Friday was day 23 for the daily equity cycle.
We need to be mindful that there is a swing high that formed off the day 21 cycle peak.

But until there is a daily cycle trend line break, this is just noise.
Since this is the first daily cycle out of the intermediate cycle low, the expectation is for this cycle to form as a right translated daily cycle printing a higher low.

The weekly cycle looks to be right on track.

The weekly cycle stands at week 4.

Equities printed a higher weekly high this week and are rising along the weekly cycle trend line.

June appears to have set the yearly cycle low.

June was month 8 and July has already formed a monthly swing low off the June print.

A break of the monthly trend line would confirm a new yearly equity cycle.

Perhaps when the dollar prints a monthly swing high, equities will have broken through the declining monthly trend line.

I hope to post more later, this is a rather busy weekend for me, so …