Cycle Trading

The dollar appears to be a little frisky this morning.

The dollar printed a 14 day left translated daily cycle low on Friday.
Wednesday is day three of the new daily cycle.
This morning we can see the dollar testing the trend line drawn off the January pivot.

A clear and convincing break above this line suggests that a new intermediate dollar cycle is in play.

The weekly chart shows that the declining weekly trend line is still intact.
We need the dollar to make up its mind here.
Last week was week 6 of a new weekly cycle and 6 weeks is just too short for an intermediate cycle.
A clear and convincing break above the declining weekly cycle trend line would invalidate week 14 as an intermediate cycle low.
By definition, a cycle low is the lowest point following the cycle high therefore we would then recognize last week as week 20.

Now if the declining weekly cycle trend line holds and the dollar breaks below last week’s low of 78.81, that would affirm week 14 as an intermediate cycle low and this is week 7 of the new weekly cycle.

Stocks appear to be losing momentum as the dollar is trying to decide its direction.

Stocks are on day 24 of the current daily cycle.
Equities often see a half-cycle low by day 25.
At day 24 there has not been a move into a half-cycle low.
We can see that MACD is beginning to roll over and the TSI is displaying bearish divergence.

Anymore dollar strength could send equities into their daily cycle decline.

So we wait for the dollar to decide which way it wants to break …