Cycle Trading

The dollar ended the week on a strong note by printing a swing low and declining trend line break.

This happened so late in the timing band, Thursday was day 23, that this is very likely the daily cycle low.

Since this new daily cycle follows a right translated daily cycle, then we can expect the dollar to make a new high.

We now will look to the intermediate cycle to try and get an idea if this will be a right or left translated cycle.

The intermediate cycle stands at week 11 and the dollar is just starting a new daily cycle. This past daily cycle ran just shy of 5 weeks and they average 4 – 6 weeks in duration.

This new daily cycle should take the weekly cycle to around week 16 – week 18, which is on the early end of the timing band for a weekly low.
Therefore this new daily cycle could be left translated, peaking by day 8.
Something to consider is the previous intermediate cycle was rather short. Sometimes cycles tend to balance out, setting up the possibility of the current intermediate cycle running past 20 weeks.

The yearly cycle stands at month 5.

Now that the dollar is rallying out of a daily cycle low, it should reduce or eliminate the upper shadow on the monthly candle. That would print a very bullish looking monthly chart.

Since the dollar printed a higher monthly high already it cannot form a monthly swing high until August at the earliest.

So now lets take another look at the big picture.

I added in the dollar bear secular bear market trend line.

The dollar is pressing right up against the 20 year support/resistance line.

If the dollar can break through this level, the secular bear market trend line would be an obvious target. Except for the fact that Bernanke hammered the dollar in the form of Q1 & Q2 as the dollar approached the 90 level.

Stocks

Equities stood at either day 6 or day 33 on Friday.

Using the red trend line, then Friday was day 6.
Using the black trend line has equities at day 33.

I suspect if the new dollar daily cycle turns out to be left translated, then that strengthens the case of Friday being day 6.

If the dollar’s new daily cycle ends up being right translated, then equities will likely correct below the black trend line shifting the likelihood to Friday being day 33.

The intermediate cycle has equities at week 6.

Twice in the past three weeks stocks were rejected by the 1380 level.
Equities were only able to close above that level 3 weeks out of the past 20.
And with the dollar beginning a new daily cycle, the prospects do not look good that stocks will be able to regain that level next week.

The yearly cycle made no progress this week

Stocks appear to have printed a yearly low in June, which would be month 8.
It appears that a monthly swing low will form from July.
A break of the declining trend line is needed to confirm a new yearly cycle.

Gold

Friday was day 16 for Gold’s daily cycle. Next week gold will enter the timing band to print a low.

If the dollar’s new daily cycle does turn out to be left translated and gold can hang in there a few more days, then there is the potential of the dollar forming a swing high as gold prints its daily cycle low.

It is hard for me to imagine how a new right translated dollar daily cycle will be bullish for gold.

At week 9, gold is running out of wiggle room.

Gold appears to be nearing the end of a 40 plus week consolidation.
As mentioned, gold enters the timing band for a daily cycle low next week. The resolution of the daily cycle will likely determine the course of the weekly cycle.

The yearly cycle stands at month 7.

We are still waiting on a break of the declining trend line to signal a new yearly cycle.

The Miners

I have to say that the Miners daily cycle is open to interpretation.

Taking into consideration that the dollar has began a new daily cycle and equities appear ready to correct, then I would say that the Miners are on day 15.

What would clear up the cycle count is if the Miners break below the 7/12 pivot as the dollar rallies next week.

The Miners are on week 9 of the intermediate cycle

Left translated weekly cycles tend to run shorter than right translate weekly cycles for the Miners.
Like gold, the Miners are running out of wiggle room and appear to be in jeopardy of printing a failed weekly cycle.

On to the yearly cycle.

The Miners appeared to have printed a three year low in May. June formed a swing low to add a level of confirmation.

However there was not follow through and now July has formed a swing high off of June.
If May’s low is taken out then we may need to re-phase the three year low.

The CRB

The CRB closed lower on Friday, which was day 19 of the daily cycle.

A break below 302 will form a swing high. The CRB’s daily cycle runs about 18 – 25 days from trough to trough. This suggests that a swing high formed will likely lead into a decline into a daily cycle low, which corresponds with the impending dollar rally.

The CRB’s weekly cycle is looking very robust.

The weekly cycle stands at week four and just cleared an important resistance level last week.

Now it finds itself bumping into the three year cycle down trend line. The CRB needs to break above this trend line for a final confirmation of a new three year cycle.

Keep in mind that the CRB’s daily cycle will likely decline into a daily cycle low and the dollar rallying out of an low suggests that the CRB will not break through this on the first attempt. Perhaps we will see a back test of the red resistance level before launching another assault on the three year cycle down trend line.

The yearly picture has not changed (much) from last week.

The CRB has a monthly swing low printed and is waiting on a break of the declining trend line for final confirmation of a new yearly cycle.

TLT

TLT appears to have peaked on Monday, day 17.

Tuesday saw a clear and convincing break of the daily cycle trend line.
TLT printed a daily cycle low on Thursday with Friday being day 1.

The intermediate cycle printed week 4 this past week.

The weekly cycle averages 12 – 22 weeks from trough to trough.
There is a possibility that instead of week 4 this is week 17.

The yearly cycle printed another higher high at month 4.