Cycle Trading

We see the dollar running into two converging trend lines of support.

With Wednesday being day 25, it is unlikely that the dollar can do anything more the to marginally break these trend lines this late in the daily cycle.

A closer looks shows that the dollar did print a lower shadow on today’s candle.
Because of the relatively narrow range on the day, the dollar has eased the parameters to print a swing low.

A break of 81.54 forms a swing low, which will likely mark the daily cycle low.

Despite the dollar selling off for three straight days, stocks also sold off for three days.

Day 22 for the equity daily cycle shows that stocks have sold off for three straight days despite the weaker dollar, perhaps sniffing out the imminent dollar rally.

The dollar should print a daily cycle low any day now. Once the dollar prints a daily cycle low, the dollar will likely rally for 15 – 20 days which will take stocks deep into the timing band for printing a daily cycle low.

So this swing high and trend line break may have marked the cycle peak for this daily equity cycle.

Gold has clearly reversed the pattern of lower highs and lower lows

Gold has an aging daily cycle count, RSI is overbought, and has closed outside of the upper Bollinger band.
Once the dollar begins to rally that should send gold to seek out its daily cycle low.

And when gold prints its next daily cycle low,

That will be time to back up the truck …