Cycle Trading

Despite the dollar going lower, Equities gave back a little today.

At Day 10 of the daily equity cycle, stocks just may have needed a breather.

It was nice to see the Miners have a bullish divergence from equities.

It is a bullish sign to see the Miners up 2.25% on a down day for stocks.
The Miners may have printed a daily swing low last Wednesday.
A swing low has formed but we still are waiting on a trend line break to confirm a new daily cycle.

It is interesting to note that Bonds were catching a bid as equities sold off.

Friday was day 24 for the daily bond cycle.
Bonds were in the timing band to print a daily cycle low.
Tuesday saw bonds break above Friday’s high, thus forming a daily swing low.
A break above the declining trend line confirms a new daily cycle.

Bonds are also in the timing band to print a weekly cycle low.

The fall triangle consolidation makes defining an accurate weekly cycle count difficult.
An 18 week count places bonds in the early part of the timing band.
A 25 week count places bonds in the latter part of the timing band.

I would venture to say if we see the dollar’s weekly cycle peak here, that may mean that this is week 18 for bonds and they would likely continue lower in concert with the dollar.

Speaking of the dollar, we see the dollar print a lower low on Tuesday.

Friday remains as the daily cycle peak.
We still need to see a break below Friday’s intraday low of 82.07 to form a swing low as a first step in confirming a daily cycle decline.

In contrast, the Australian Dollar did confirm a new daily cycle today.

Tuesday was day 6 for the AUD.
We see that the AUD broke above the declining cycle trend line to confirm a new daily cycle.
Following a failed daily cycle, this could also mark a new intermediate cycle.

Last week was week 22 for the intermediate AUD cycle.
The Australian Dollar is in the timing band to print an intermediate cycle low.
Today’s action forms a weekly swing low.

It seems that gold did notice the dollar and the AUD.

Tuesday was day 13 for the daily gold cycle.
It was important to gold’s bullish case to see it react positively to the sell off in the dollar.
We will need to see gold break above the day 3 high of 1619.60 to have this daily cycle to form in a right translated manner.
Of course once the dollar prints a bottom, that will likely send gold in search of its own daily cycle low.

But for now, the continuing framework remains bullish …