Cycle Trading

The dollar printed a yearly cycle low in September.

The dollar broke the declining monthly trend line in January
But not until this past week did it finally form a monthly swing low.
The dollar is currently on month 6 of the yearly cycle.

The current three year cycle sports a 14 month peak and sits at month 22.
The dollar is in the second 3 year cycle of the 15 year super cycle.

For comparison, lets look at the previous two super cycles.

The 1978 – 1992 Super Cycle is comprised of 5 three year cycles:
36, 28, 45, 38, 19 — 166 months

The second 3 year cycle peaked on month 26 followed by a two month sell off.

The 1992 – 2008 Super Cycle is also comprised of 5 three year cycles:
30, 41, 35, 41, 39 — 190 months

The second 3 year cycle peaked on month 39 with a 3 month sell off.

Both of these Super Cycles peaked in the third 3 year cycle, between months 74 & 104 meaning that the first 70 – 104 months are usually a wildly bullish time for the dollar printing higher three year cycle highs.

Over the past 30 plus years, the most frequent timing of a yearly cycle low for the dollar was 11 months, followed closely by 12 months.

With the current yearly cycle at 6 months and allow for another 5 for a yearly cycle low — -that would be late Summer.
Another 5 months brings the current 3 year cycle to 27 months, which would be too early for a three year low.

Allowing for another yearly cycle of 11 months, that would bring a three year cycle low for the dollar to the summer of 2014.

At some point, the dollar has to begin its primary decline into its three year low.
Did that already begin?

Detailed in the above chart is the last 3 year cycle of the previous 15 year super cycle.
Also detailed is the first 3 year cycle and the current 3 year cycle of the current super cycle.
To answer the question of whether or not the primary of decline into a 3 year low has begun we will start with the current yearly cycle.
If the current yearly cycle exceeds September’s high of 84.10 then the 3 year primary decline has not yet begun.
However, if the breaks below the previous yearly low of 78.60, that confirms a failed yearly cycle and also confirms the three year dollar decline.

There is a good possibility that the three year decline has already begun as evidenced by the continued printing of lower three year cycle highs.

The dollar has failed to print a higher 3 year cycle high since it began it descent into its previous 15 year super cycle low back in 2002.
Normally the first three year cycle of a new super cycle prints a higher three year cycle high — that did not happen.
I believe there are 3 reasons for this:
QE!, QE2, QE Infinity.