Dollar Breather …

The dollar had a big 1.03 percent gain on Wednesday and it seemed to take a breather on Thursday.

Thursday was day 2 for the daily dollar cycle. After the convincing trend line break on day 1 the dollar backtested the declining trend line before rallying into the close. We should still see a few more days of strength before the dollar rolls over. But since the recent daily cycle was a failed daily cycle, our expectation is for this daily cycle to form as a left translated daily cycle peaking on or before day 8.

Despite the dollar being down, stocks continued their sell off today.

Stocks print a daily cycle low every 30 – 45 days. So with stocks are on day 36, they are in the timing band to print a daily cycle low. In real time we considered day 27 as a daily cycle low. But it looks more like it set the daily cycle trend line instead. Often times equities seek out their cycle low as the dollar rallies.

I expect that with a peak to the dollar cycle some time over the next several days, that will mark the equity daily cycle low. Then as the dollar drops into its primary daily cycle decline, we will see stocks emerge from their daily cycle low.

The Miners delivered a pleasant surprise today.

The Miners are on day 29 of their daily cycle. The are (over)due to print a daily cycle low. While Thursday did not form a daily cycle low, the Miners printed a 2.75 % gain on a day that stocks sold off for 0.67%. This bullish divergence on the Miners is one of the signals that we are looking for, but the Miners have a long way to go.

The weekly Miner cycle is currently working on week 29. The Miners are deep in the timing band for an intermediate cycle low. While a confirmed new daily cycle will likely mean a new intermediate cycle, the prudent move may be waiting for the second daily cycle before jumping on board…