Cycle Trading

Equities started out lower today.

Then Equities found support at the daily cycle trend line and reversed higher.
Stocks will not enter their timing band for a daily cycle decline for another 14 trading days.
With 85 billion a month in Fed printing coupled with being 14 points off the all time highs seems to be an intoxicating combination propelling equities higher.

The dollar broke out to a new daily cycle high today.

Wednesday was day 8 for the daily dollar cycle.
By breaking above the previous daily cycle high, the dollar has confirmed that this is a new daily cycle.

Now we have been watching to see if this daily cycle will form as a right or left translated daily cycle.
Historically speaking, most left translated daily cycles peak by day 8.
So unless we see a reversal on Thursday this begins to look more and more like a right translated daily cycle.

On to gold — Wednesday was either day 24 of the daily gold cycle or day 2.

Lately gold has been positively correlated with the dollar and appears to still share that correlation.

On Monday gold broke below the trend line and printed a reversal candle.
At 22 days, that is right in the timing band for a daily cycle low.

We will need to see gold break above the declining (gray) trend line to signal a new daily cycle.
A break above 1619.60 would confirm a new daily cycle.

Consequently, a break below Monday’s low of 1589.60 indicates that the gold is still in it daily cycle decline.

If Monday was not the daily cycle low and gold has one more push lower, that would make Wednesday day 24.
At this point a panic day down could mark the mark the low.

Either way a new gold cycle is almost upon us.

The CCI Index seems to be shrugging off the dollar rally.

Wednesday was day 15 for the daily cycle for the CCI Index and the CCI is on the verge of breaking out to a new high daily cycle high.

Perhaps it is sniffing out an impending top to the dollar …