Cycle Trading

The dollar established a new daily cycle high and has locked in a right translated nature to this daily cycle.

At some point over the next two weeks the dollar should print a daily cycle low.

I think that the dollar’s action over the past few days signals that we will have a confirmation that the dollar printed a yearly cycle low in September.

September is the lowest point of the yearly cycle.
A break below 78.60 signals that the yearly cycle decline is still in play.

More likely, since the current daily cycle is forming as a right translated daily cycle,
the expectation is for the next daily cycle to print a higher daily cycle high, which should break above the September high of 81.66

That will confirm that September hosted the yearly cycle low and February is month 5.

Stocks followed through lower today.

At 35 days, stocks can still trend lower for another 2 weeks.
Which leaves enough time for the dollar to rally some more before seeking out its daily cycle low.

I want to point out that stocks did close up off the lows of the day today, leaving behind a lower shadow.

Should stocks break above 1511.95 then a swing low would form.

I mention this because it was around this time last year that stocks, fueled by operation twist, went on a 4 month run.

That four month run saw equities tack on another 23% while only seeing minor 20 – 40 point pullbacks along the way.
And with Ben printing 85 billion monthly, we will need to keep an open mind to upside equity surprises.

Speaking of surprises, gold printed a reversal today.

Thursday was day 18 for the daily gold cycle.
Gold has been caught in a yearly cycle decline since October.

With gold in the timing band to print a daily cycle low with a stop below 1575,
today’s reversal presents an opportunity for those brave enough to test the waters …