Cycle Trading

Let’s see, we have Super Mario set to speak on Thursday and the jobs numbers due out on Friday.  I believe that the markets will find a reason to break from their holding pattern.

Wednesday was likely day 2 for the new daily dollar cycle.
I think that the dollar printed its daily cycle low last Friday and we are now waiting on a swing low and a declining trend line break to confirm a new daily cycle.

It turns out that I misspoke last night about the parameters needed to be met to confirm a new intermediate cycle.

Last night I incorrectly stated that a break above 81.72 forms both a daily and weekly swing low.

Well, I was close.  A move above 81.72 forms a daily swing low.  
A move above 81.82 forms a weekly swing low.

It is ceratainly possible to form both the Daily and weekly swing low in the same session.

A new intermediate dollar cycle will probably not be good for stocks.

Wednesday was day 30 for stocks.
Stocks will reach the beginning of their timing band for a low in 5 days.
With the dollar late in its timing band to form a low I think that it is unlikely stocks will break to new highs in this daily cycle.

Once the dollar forms a swing low, I think we will see equities accelerate into their own daily cycle low.

Tuesday was day 14 for gold’s daily cycle.
Gold did form a swing high today which is 4 days before the beginning of gold’s timing band to print a daily cycle bottom.

Since gold’s daiy cycle can run unti 28 days, Wednesday’s swing high may just be noise.

A break below the rising cycle trend line would confirm a move into the daily cycle low.

So the markets seem to be in a holding pattern until the dollar confirms a new daily cycle.

I believe that once that happens,
We will see the dollar run…