Cycle Trading

Day 6 or day 16?

The previous daily cycle for the dollar ran long. It stretched out to day 35.
We often see a stretched cycle be balanced off by a shortened cycle.
I am beginning to think that is what we are witnessing with the dollar.

Three points that support this view:
1) The Schaff Trend Cycle is acting like a new daily cycle has begun.
2) Taking in account the previous daily cycle, there are now two daily cycles combining for 45 days, which is in sync with the expectation of days needed for two daily cycles. The long and short cycles balanced out.
3) I checked back over the past three years. After a daily cycle has peaked no counter trend rally lasted longer than 4 days without initiating a new daily cycle.

Stocks

Just as I think that the dollar is rallying out of a daily cycle low, it looks more and more like equities are in a daily cycle decline.

Stocks lost the 10 day MA
RSI (5) has reached oversold levels
Stocks gave up 3.2% over the past 7 days.
Daily cycle declines typically last 7 – 15 days.
Stocks correcting into a daily cycle decline would be congruent with the dollar rallying out of a daily cycle low.

Once a daily cycle low has printed, it stands a good chance of setting the intermediate cycle trend line.

The CCI

The CCI printed its yearly cycle low, and presumably the three year low, in June and currently stands at month 6.
The CCI still needs to break above the declining cycle trend line to confirm a new 3 year cycle.
We may yet see a test of the bottom stem before a reversal higher.

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