Cycle Trading

Commodities gave us a downside surprise on Thursday.

At day 16, the CCI Index was nearing its timing band for a daily cycle low.
An early signal that the CCI may have been nearing a daily cycle decline came on Wednesday.

Commodities tend to be in sync with the Aussie dollar, which formed a swing high last Wednesday.
Thursday provided follow through to the downside and breached the daily cycle trend line confirming a daily cycle decline.

Monday is day 19 and the Aussie dollar is in the timing band for a daily cycle low.
A swing low could signal the commencement of a new daily cycle

The Aussie dollar printed a yearly cycle low in May 2012.
Two intermediate cycles have occurred with an intermediate cycle low printing the 1st week of March.
Yearly cycles are comprised of 2 – 3 intermediate cycles which means that March was likely the yearly cycle low.

Getting back to the daily Aussie dollar. A daily cycle low should form this week. Once the daily cycle low is printed, that will signal higher commodity prices…