Cycle Trading

We continue to watch the dollar’s daily cycle decline on Wednesday.
The dollar closed lower than the previous day, although it did not print a lower low.

I will admit that the dollar did show some strength this morning. But as long as the dollar remains below the declining cycle trend line (a) that is developing, then the daily cycle is still in decline.

The Schaff Trend Cycle is also rolling over. Once the STC breaks the 75 line, there is a very high probability that the dollar will continue lower until the STC reaches the 25 line.

We are still waiting on the dollar to breach the daily cycle trend line that will be the final confirmation of the dollar seeking out its daily cycle bottom.

Wednesday was day 21. The dollar is in the timing band to print a daily cycle low.
Now we begin to look for a swing low and a break of the declining cycle trend line to mark the daily cycle low.

It is no surprise that as the dollar continued to sell off, equities continued to rally.

Wednesday was either day 31 or day 4 of the new daily cycle.
Why I am uncertain is because equities printed a bottom at day 27, which is shorter than the normal timing band.
Secondly, the daily cycle decline normally last 7 – 15 days, this one lasted 6 days.
Another signal for a daily cycle low is that RSI 5 usually gets oversold and in this case it only got close.

However the break of the daily cycle trend line and the swing low are the reasons why I am keeping an open mind to this being a new daily cycle.

As stocks rallied on the weaker dollar so did the CRB.

Wednesday was day 17 for the CRB’s daily cycle.
The CRB has rallied 12% since printing its presumed three year low.
And now there is a possible stair step pattern emerging.

So we continue to watch for the dollar to bottom to give us a clue to where to expect a swing high.