Cycle Trading

Tuesday saw the dollar break its daily cycle trend line to begin its decline into a daily cycle low.

So the dollar followed a right translated daily cycle with what appears to be a left translated cycle.
The expectation for the dollar following a right translated cycle was to print a higher high
That does not appear to be in the cards.

The dollar’s timing band for a low begins on day 18 and can stretch for two weeks.
A break of the daily cycle trend line with Wednesday being day 12 suggest a window of another 1 to three weeks for the dollar to print a low.

Let’s look at the weekly picture

The dollar’s intermediate cycle sits at week 6.
Notice that the dollar is forming a mini weekly triangle consolidation.
With the daily chart pointing to further downside, it appears the dollar is destined for a downside break on the mini consolidation.
That could mean another 12 to 16 weeks of trending lower before an intermediate cycle low is printed.

However, the dollar appears to be embedded in a larger weekly consolidation.
The dollar could break that lower trend line of the mini consolidation in the above weekly chart and still bounce off the lower stem of around 79.00 shown in the chart below

So we will monitor this as it unfolds.

Bonds Continued lower on Tuesday.

Bonds were perhaps signaling the dollar’s direction Monday with its downside break.
Now both the dollar and bonds appear to be headed lower in a failed daily cycle.

It appears that gold took notice of these developments

Gold formed a swing low on Tuesday and has broke through the declining trend line in the early morning hours.

This looks like Wednesday will be day 2 for gold’s new daily cycle.

Our expectation for gold would be to form a higher high in this new daily cycle.

And can there be an asset class more unloved than the Miners?

The Miners are now in a 4 month beat down of a yearly cycle decline, as we chronicled in the Weekend Report.

However a swing low was formed which could potentially mark a daily cycle low.
There are two trend lines where traders will likely re-enter.
However Monday’s low provides a stop for the more adventurous.

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