Cycle Trading

Monday was day 19 for the dollar’s daily cycle and the dollar followed through to the downside according to our framework of expectations.

The dollar found some support at the 83 level.

The daily cycle decline should continue until at least the daily cycle trend line is penetrated. Since the timing band for the dollar to print a low runs through day 28, the dollar could sell off for up to another two weeks.

The CRB Index also conformed to our framework and rallied today by breaking out of consolidation.

The CRB Index stands at day 15.
While the CRB appears to be breaking free of the recent consolidation,
It is running into resistance form the October & December pivots.

It is not likely for the CRB to be able to break through this level on the first try.
We may see the CRB chop around this level before rolling over into a daily cycle decline.

Should the CRB be able to break through this during the current daily cycle then that would be a very bullish signal.

Both equities & gold failed to capitalized on today’s dollar weakness.

Equities appear to be on day 2 while gold stands at day 11.

Both gold and equities are running into a resistance level.

So while commodities, in general look bullish, if gold fails to rally here then gold would be in jeopardy of printing a left translated daily cycle.

It could be that the dollar needs to break below the 83 level before they respond.

We will certainly watch this framework continue to develop.