Cycle Trading

The dollar broke above the previous daily cycle high confirming Tuesday as day 2 of the new daily cycle.

Now we turn our attention to see if this daily cycle will form as a left or right translated daily cycle.

I suspect that we will see bonds form as a right translated daily cycle.

As we discussed last night, it looks as though bonds may have found their yearly cycle low.
Therefore we would expect the first daily cycle to form as a right translated cycle.
Day 7 saw bonds close above the accelerated declining cycle trend line signaling a new daily cycle.
Bonds need to break above the declining blue trend line to confirm a new daily cycle.

With both the dollar and bonds showing strength, stocks sold off for a third straight day.
Stocks tend to seek out their half cycle low around around 15- 20 days
At day 15, the question is if equities are in the process of seeking out a half cycle low or is there something more drastic at hand.

A break of the weekly cycle trend line would signal that the intermediate cycle is in decline.

You will notice that when the TSI had a bearish crossover in the 50 – 75 level combined with a later weekly cycle count has foreshadowed an intermediate equity decline.

Gold seems to be the beneficiary of the equity weakness of late.

Day 18 saw gold make progress toward regaining the 1620 level which would lock up a right translated nature to this daily cycle.
It seems with the momentum that gold is picking up a test of the 50 MA may occur prior to the daily cycle peaking.

And a right translated daily cycle is the first signal that a yearly cycle low has printed.

Once we have confirmation of the yearly cycle low in hand, then gold should really start to shine …