Cycle Trading

In the Weekend Report we discussed how the dollar broke below the previous daily cycle low signalling a failed daily cycle.

Today the dollar managed to make a slightly lower low.

The daily cycle peaked on day 2 and has been trending lower over the past 6 days.
With Monday being day 8, we can expect the dollar to trend lower over the next 2 to 3 weeks.

Bonds are also in a failed daily cycle.

Bonds have been leading the dollar lower.
They peaked on day 3 and today makes day 10 for the daily bond cycle
Where the dollar printed a failed daily cycle on Friday, bonds did so last Wednesday.
Bonds back tested the previous daily cycle low and was soundly rejected by it today.
We should see bonds continue to drop over the next two weeks.

Stocks responded positively.

Today was day 20 for the daily equity cycle.
Stocks may have just printed their half cycle low on Friday, setting the daily cycle trend line.
As bonds and the dollar start to accelerate into their daily cycle lows, that should propel equities to set a new yearly high.

Which ought to us bring some good cheer …