Cycle Trading

Friday saw the dollar form a swing low off the low printed on Thursday, which was day 25.

The dollar normally prints a low every 18 – 25 days.
Because the swing low occurred late in the timing band for printing a daily cycle low, the odds are good that we witnessed a daily cycle low.

A break above the declining cycle trend line will confirm a new daily cycle.

This daily cycle broke below the previous daily cycle low making this a failed daily cycle.

So where does this leave the weekly count?

A failed daily cycle coupled with a weekly trend line break signals an intermediate cycle decline.

This was week 16 for the dollar’s intermediate cycle.
A break above 82.72 forms a weekly swing low and a weekly declining trend line break which signals a new intermediate dollar cycle.

The yearly cycle for the dollar currently is at month 6.
The three year cycle stands at month 15.

The dollar has been printing a stair step pattern since emerging from its three year low back in 5/11.

The dollar looks to have began a new daily, and quite likely a new intermediate cycle. Will it continue this stair stepping pattern?

The 23 year resistance line suggests that there is room for one more leg higher before Bernanke will drop the hammer with another round of QE.

Stocks

The daily equity cycle appears to have peaked on Tuesday, day 20.

Stocks have printed a lower highs and lower lows since Tuesday.
We see that the 1400 level is acting as a support level.
A close below that could send stocks down to test the 1360 level.

The weekly equity cycle printed week 11 this week.
A break below 1398 forms a weekly swing high.
A break of the rising trend confirms that the intermediate cycle is in decline.
If the dollar is beginning a new intermediate cycle then that increases the odds that equities left behind an intermediate cycle peak.

Equities printed a higher monthly high this month.
That brings the 4 year cycle to 41 months.
The odds are good that we will see this result in a right translated 4 year cycle.
Right translated 4 year cycles declined on average for only 3 months into their 4 year cycle lows over the past 25 years.
The left translated cycles declined for over 10 months into their 4 year cycle lows.
(2000 – 2002 & 2007 – 2009)

Twice over the past 25 years stocks printed an 8 month yearly cycle
Have they done that again?

If this is month 10, then that suggests that equities should roll over soon into a yearly cycle decline.

If month 2 is the correct count, then that leaves plenty of time for more upside.

Gold

Gold managed to break through the year long declining trend line.

Now with a daily cycle count at day 24, a swing high should send gold seeking out its daily cycle low.

Should gold manage to print daily cycle low above the declining trend line, that would be a very bullish signal.

Gold’s break out this week confirmed a new weekly cycle began making this past week the fourth week of the current intermediate cycle.

Gold’s break out this week helps to clarify the yearly cycle.

August has printed a higher monthly high forming (barely) a swing low.
That makes May the yearly cycle low and August is month 3 of the new yearly cycle.

The confirmation of a new yearly cycle affirms the weekly count’s accuracy.
The next daily cycle will be the third daily cycle for this intermediate cycle.
The intermediate cycle could run another 8 – 15 weeks before peaking.

The Miners

It probably is no coincidence that the dollar formed a swing low Friday and the Miners formed a swing high.

The Miners daily cycle runs 16 – 28 days from trough to trough meaning that a swing high formed on day 23 has pretty good odds of marking the cycle peak.

Week 4 sees the Miners testing the three year cycle declining trend line.
It is not likely that the Miners will be able to break through with the daily cycle due for a low.
A new daily cycle should see the Miners break through the declining trend line.

The Miners still need to break through the declining monthly trend line to confirm a new yearly cycle.

The CRB

The CRB also printed a swing high on Friday, day 16.

The timing band for a low begins on Tuesday.
A break of the rising cycle trend line will confirm that the CRB has begun its decline into a daily cycle low.

The weekly chart shows the CRB breaking above the declining 3 year cycle trend line.

This confirms a new three year cycle.

Since the daily cycle looks to be in decline, it is likely that we see the CRB crawl along the declining trend line until the daily cycle forms a swing low.

Then we should see one more push higher.

Again we see that the CRB has broke through the declining trend line declaring a new yearly and three year cycle.

And for what its worth, here is a 15 chart of the CRB

Bonds

TLT printed a low a week ago from last Thursday.

A swing low has been formed and now TLT is right up against the declining cycle trend line.
TLT will need to break above the declining trend line to confirm the new daily cycle.

The weekly chart shows TLT back testing the previous consolidation zone.
A break above 126.38 forms a swing low and declares a new intermediate cycle.

The yearly cycle shows TLT at month 5 back testing the 120 level and leaving behind a bullish tail.

This suggests that we will see one more leg higher before rolling over into a yearly cycle decline.

So the dollar printed a swing low on Friday.
Stocks formed a swing high on Wednesday
The CRB and the Miners formed a swing high on Friday.
Gold has not formed a swing, but the daily count stands at day 24.
Bonds printed a swing low ahead of the dollar and we are now waiting on confirmation of a new daily cycle.

Below you will find the weekly Cycle Tracker

I also included a link on my blog roll for the weekly Cycle Tracker