Cycle Trading

Friday was day 7 for the daily cycle and the dollar hit an intraday high of 80.27.

This is the second daily cycle of the new intermediate.
This first daily cycle formed as a 23 day right translated cycle.
The dollar on Friday fulfilled the expectation of printing a higher high following a right translated daily cycle.

The weekly dollar cycle printed week 6 of the intermediate cycle.

The dollar has (finally) broken through the declining cycle trend line providing a level of confirmation of a new intermediate cycle.
A weekly swing low will form when the dollar breaks above 80.42. That will provide final confirmation of a new intermediate cycle.

Because the yearly cycle is in decline (as we will see in a moment) the expectation is for the dollar to print left translated intermediate cycles into that low.

Over 80% of the time the dollar’s weekly cycle will peak by week 8 and then decline into the intermediate cycle low.

In order for the dollar to follow that script, the current daily cycle will need to form as a left translated, failed daily cycle.
Left translated failed daily cycles normally fail by day 8.

Based on this, I would expect the dollar to break above the 80.42 level on Monday, and then reverse into the close.

The yearly dollar cycle peaked on month 5 and formed a swing high the following month.

The yearly cycle currently stands at month 8 and has been in decline since month 5.
As stated, the weekly cycle was on week 6. Since the weekly cycle runs from 18 – 25 weeks from trough to trough, the weekly cycle could decline for another 12 to 19 weeks which could take the yearly cycle out to months 11 or 12.

That means that the current intermediate cycle will likely usher in the yearly cycle low.

Stocks

Just as the dollar needs one more push higher to form a weekly swing low to confirm a new intermediate cycle, equities need one more push lower to break below the previous daily cycle low of 1396.56 confirming a intermediate cycle decline.

Friday was day 38 for the equity daily cycle. The daily equity cycle normally runs 35 – 45 days from trough to trough, so stocks are in the timing band to print a low. Things are lining up for the dollar to make one jab higher, which should send stocks lower.

The weekly cycle peaked on week 14.

At 20 weeks, equities are in the timing band to print a weekly cycle low.

A new equity daily cycle will likely result in a new intermediate cycle, as well.
One more push lower will extend the weekly cycle out to 21 weeks, which is perfectly acceptable

In fact, a narrow range week that breaks below 1396 would ease the parameters of forming a weekly swing low the following week.

It would also breach an important support/resistance level which will allow the Big Boys to load up as technical traders sell into the break.

The SPY printed a big buying on weakness day on Wednesday and is following up with another BOW day on Friday.

The BOW prints are also signaling a low is near.

October is month 4 of the yearly equity cycle.

The new intermediate cycle should last 5 or 6 months bringing the yearly cycle to month 9 or 10.

Gold

Gold made a lower low on Wednesday day 20.
Then formed a swing low on Thursday.

Friday gold held above the Wednesday low keeping the possibility alive that Friday is day 2 of a new daily cycle.

A break of the declining cycle trend line confirms a new daily cycle.

Gold’s weekly cycle printed week 23.
With gold’s daily cycle forming a daily swing low in the timing band for a low makes it likely that week 23 was the intermediate cycle low.

A break above 1731 forms a weekly swing low and forms a trend line break that confirms a new intermediate cycle.

October is month 5 for gold’s yearly cycle.
Gold tested the 1800 level and pulled back.
Once gold breaks above the 1800 level, it has a date with 1900.

The Miners

Wednesday saw the Miners have a big sell off that tagged 480. Thursday the Miners reversed and tacked on an impressive 3% gain forming a swing low as well. Wednesday being day 20 placed the Miners right in the timing band to print a daily cycle low. That makes Friday possibly day 2 of the new daily cycle.

Until there is a break of the declining cycle trend line, this just looks promising.
A break of the aforementioned declining trend line confirms a new daily cycle.

After 5 weeks of selling off the Miners tagged the important 480 pivot.
Tagging that pivot so late in the timing band makes it very likely the Miners printed a 23 week intermediate cycle low.

A break above 503 forms a weekly swing low and breaks the declining trend line confirming the new intermediate cycle.

The miners yearly cycle sits at month 5.

We see that the miners are back-testing the declining three year cycle trend line and the important 480 level.

The CCI

Last Friday was day 17 and the CCI set the declining cycle trend line.
Then it proceeded to sell off all this past week.

This past Friday was day 22.
A break above 569 forms a swing low.
Since it is getting late in the timing band this swing low will quite likely mark the daily cycle low.

The CCI sold off dramatically this past week negating week 17 as the intermediate cycle low.

This past week was week 21 and the CCI is due to print a weekly cycle low.
A break above 580 forms a weekly swing low and trend line break.
I would not rule out the CCI making one more push lower and breaching the 560 level it the dollar has one more spike to go.
Such a move would help to ease the parameters of forming a weekly swing low.

October is month 4 for the yearly cycle.
The CCI’s rally out of the three year low was halted by the convergence of the declining three year cycle trend line and the important 600 level.

The impending new intermediate cycle should give the CCI a fresh set of “legs” to give it the energy to break above the 600 level.

Bonds

Friday was day 6 for the Bonds daily cycle.

Bonds have been trading in a range for over a month.
Following a left translated daily cycle my expectation is for bonds to break to the downside.

This was week 6 for the intermediate bond cycle.

Bonds formed a weekly swing low on week 2 and pierced the declining cycle trend line on week 4.

I believe that since TLT could not close above the declining trend line speaks to the weakness of bonds.

The yearly bond cycle peaked on month 4 and formed a swing high on month 5.
The yearly cycle is in decline. The timing band for a yearly low runs from 9 – 13 months indicating another 2 – 6 months of decline.