Cycle Trading

This morning we discussed the possibility of the dollar losing the accelerated (red) trend line.

Well the dollar crashed through that level signaling its intention to seek out its daily cycle low.

The dollar added additional confirmation by closing below the important 80 level.

Final confirmation will come with a break of the (black) daily cycle trend line.
At day 14, the dollar still has another 4 more days before entering its timing band for a daily cycle low.

The dollar could print a daily cycle low sometime over the next 1 – 3 weeks.

A day 10 peak holds a greater likelihood of this cycle forming as right translated printing a higher low.

Now should this current dollar cycle run on the long side of the timing band and break below the 12/19 low, that would produce a failed daily cycle.

Under a failed daily cycle scenario we would not consider this as the first daily cycle of a new weekly cycle.
We would include this cycle with the previous intermediate cycle.

The big dollar drop was not lost on equities.

Equities broke out of consolidation fueled the the declining dollar.
That propelled stocks to within a couple of points of the post recovery high.
Also responding to the dollar plunge was commodities.

The CCI Index formed a swing low today.
It was halted by the accelerated (black) declining trend line.
The CCI needs to break above the red declining trend line to confirm a new daily cycle.

Also waiting on confirmation of a new daily cycle is gold.
Gold formed a reversal on Friday, January 4th.
Gold formed a swing low on Wednesday and Thursday saw good follow through.

Gold is right up against its daily cycle trend line.
A break above that line confirms a new daily cycle and likely a new intermediate cycle.

Once gold crosses that line, others will follow …