Cycle Trading

Regardless of the daily cycle count technical damage was done to the dollar chart.

The dollar clearly breached the three year cycle rising trend line.
This signals that the decline into the year cycle low has begun.

The intermediate cycle peaked in July and has been declining since.
While the weekly cycle count seems pretty clear, there is still some ambiguity on the daily cycle.

The last clearly defined daily cycle low was printed on 7/19.

A case can be made that either day 13 or day 25 was a daily cycle low.
I favor 8/23 as the DCL because a 25 day daily cycle low fits in the regular timing band for a daily cycle low.
So that makes Friday day 10.
(But possibility day 23 if 8/7 was the actual daily cycle low.)
Either way, the dollar is currently locked in the 2 nd straight failed daily cycle for the current intermediate cycle.

As previously stated, the weekly cycle count seems pretty clear.

This was week 18 for the dollar’s intermediate cycle.
We need to be mindful that there is a convergence of the 50 and 200 weekly MA’s right below this week’s print, which also happens to mark the October pivot.

This is one reason why we need to be open to the possibility that 8/07 did mark the last daily cycle low and Friday was actually day 23.

Should the dollar break above 81.67 it will print a weekly swing low.

Now here is something interesting:

The last time the dollar came off a monthly swing high and met a converging 50 & 200 weekly MA the dollar printed an intermediate cycle low and rallied for three weeks.
I am not predicting anything, just staying open to the possibilities.

The yearly cycle so far peaked in July at 5 months, formed a swing high has now breached the three year rising trend line at month 7.

It certainly looks like the yearly cycle has topped and quite possibility the three year cycle.

Stocks

Friday was day 3 for the new equity daily cycle.

At 29 days, the previous daily cycle was short of the normal timing band.
We need to be mindful that cycles do tend to balance themselves out.
And with Mario & Ben turning on the presses, I would not be surprised to see this new daily cycle stretch to the long side.

The start of the new daily cycle brings the intermediate cycle to week 13 which saw equities break out to new highs.

Daily cycles run about 35 – 45 days. Assuming a 45 day daily cycle brings the weekly cycle to week 22 — right in the timing band for an intermediate cycle low.

Looking at the yearly cycle, it is becoming apparent that June marked an 8 month yearly cycle low.

That followed two QE-stretched yearly cycles of 16 & 15 months, bringing some balance to the yearly cycle.

Gold

Gold ended the week strong bringing the daily cycle count to day 16.

Gold enters its timing band for a low in two days.
The timing band runs until day 28.
That leaves almost two weeks for gold to rally before seeking out its daily cycle low.

(Of course we will pay attention to when the dollar bottoms to help us spot the daily cycle peak for gold)

The gold intermediate cycle stands at week 6.

Gold’s timing band for an intermediate cycle low runs from 17 – 25 weeks.
That suggests another 2 – 4 more months left on the clock for this intermediate cycle, which does correspond with this being a seasonally bullish time of the year for gold.

One thing that is not in sync with gold being at week 6 is the dollar’s weekly count.
The dollar is clearly at week 18 and, as previously discussed, has entered its timing band for an intermediate cycle bottom.
The dollar’s weekly cycle calls into question whether or not the third week in July housed an intermediate low for gold.
What does sync up with the dollar weekly count is gold’s intermediate cycle low printed in May. That would put gold at week 16.

What this means is that we will need to on guard for a weekly swing high on gold that corresponds with a weekly swing low on dollar.

Gold broke through the declining trend line in August to confirm a new yearly cycle.
September is month 4 and is showing nice follow through.

The Miners

Last Friday saw the Miners print a swing low and declining cycle trend line break confirming a new daily cycle.

Friday was day 5 for the Miners daily cycle.

With equities beginning a new daily cycle, that should help provide some tailwind to this new daily cycle.

The Miners closed above an important resistance level on week 6.
Since the Miners get their marching orders from gold, then we will also need to be suspicious of a gold weekly swing high corresponding with a dollar weekly swing low.
But for now, I will stick with a week 6 intermediate cycle label.

The yearly cycle for the Miners is a thing of beauty !!!

The Miners FINALLY break through the declining three year trend line confirming a new yearly and three year cycle.

The CRB Index

Like equities, the CRB also printed a daily cycle low this past week.

That makes Friday day two for the new daily cycle.

This was Week 11 for the CRB Index.
The CRB close above the 310 level, which had been a support/resistance level.
With a tail wind of a new equity cycle combined with a falling dollar should have the CRB zeroing in on filling the gap that was left behind from last year.

The yearly cycle stands at month 3.

We have the Miners, gold, equities and the CRB all in new yearly cycles.
This just adds support to the notion that the dollar’s three year cycle has been left behind in July.

Bonds

Bonds joined the dollar in selling off on Friday.

Unlike the dollar that is still seeking its intermediate cycle low, bonds appear to be in the first daily cycle of a new intermediate cycle and therefore I would expect bonds to print a low above the previous daily cycle low.

Bonds appear to be on week 3 of a new intermediate cycle.
This cycle already has formed a weekly swing high.
While it may be premature to label this swing high as meaningful, certainly a break below the previous weekly low of 120.52 would be significant.

There is an outside chance that this is really week 24 of the previous intermediate cycle.

If the current daily cycle fails, then I would be inclined to include this week as part of the previous weekly cycle.

Over the past 10 years, only 3 intermediate cycles out of 25 extended past 22 weeks so the odds favor this being week 3.

The yearly cycle peaked at month 4, formed a swing low on month 5 and is currently breaking below an important support level of 125.

TLT is also sitting right on the (red) yearly cycle trend line. A break below that would confirm the yearly cycle is in decline.