Cycle Trading

Last Monday, January 14, was day 16 for the dollar’s daily cycle.
The dollar formed a swing low the following day.
And since then it has been in a triangle consolidation.
Now we are waiting for the dollar to decide which way it wants to break.

A break below the (black) trend line would signal a final plunge into a daily cycle low.
If Tuesday were day 21, then the dollar should not have been able to resist the gravitational pull of the impending daily cycle low.

Should the dollar break above the red declining trend line, then that would confirm a new daily cycle making Tuesday day 5.
With each passing day it seems more likely that the dollar left behind an early 16 day, daily cycle low.

Despite the reversal of the dollar, dollar sensitive assets seemed to shrug it off.

The Miners had a nice gain today.

In the Weekend Report we discussed how day 11 on the Miners daily cycle may have hosted a daily cycle low.
Should the Miners rally past last Tuesday’s high of 438.21, then that would confirm day ll as an early daily cycle low.

So while today was a positive development for our framework for the Miners, we still await a break of the declining (blue) intermediate trend line to confirm a new intermediate cycle.

Gold also closed higher on Tuesday.

Tuesday was day 11 for gold’s daily cycle.
Gold appears to be consolidating just below the 1700 level.
Gold may need another day of consolidation before attempting the break through that level.

Silver also did well today.

Silver broke through the 31 resistance level last week.
Now silver is rallying into its daily cycle peak.

As gold and silver are in the first daily cycle of a new intermediate cycle, the expectation is for these cycles to form as right translated cycles. So a peak on or after day 13 will likely result in a right translated cycle.

A right translated daily cycle is the hallmark of a new intermediate cycle.

Hopefully gold will follow silver’s lead …