Cycle Trading

The Miners formed a swing low on Monday

Last Wednesday was day 29 for the daily Miner cycle. It appears that a daily cycle low printed then. The Miners then drifted higher Thursday and Friday, but did not form a swing low until today. In order for the Miners to confirm a new daily cycle, they would have to break above the declining trend line some 60 points north of Monday’s close. So it is likely to see a good portion of the this daily cycle unfold with out confirmation of a new daily cycle.

For those of you that like to enter on a swing low will find your position about 6% above the cycle low, with no confirmation of a new daily cycle. One strategy could be to sit on the sidelines this let this daily cycle prove itself by forming as a right translated daily cycle and then jumping in at the next swing low.

Stocks confirmed a new daily cycle today.

Last Thursday was day 36 for the daily equity cycle. A swing low formed on Friday. Monday saw stocks break above the declining trend line confirming a new daily cycle.

Since this is the 4th daily cycle of the current intermediate cycle, our expectation is for this to break out to new highs and then peak on or before day 20. Then we should see this cycle sink into an intermediate cycle low, breaking below the recent day 36 low.

I believe that some of the bullishness discussed above can be attributed to the dollar.

The dollar printed a reversal today, which was day 4 of the daily cycle. Recall that this new daily cycle follows a left translated, failed daily cycle.

Here is the big picture:

The dollar printed a yearly cycle low last September. That first intermdiate cycle was comprised of 4 daily cycles. Please notice that the final 2 daily cycles of that first intermediate cycle consisted of failed daily cycles. The dollar printed its intermediate cycle low on February 1st.

The dollar is currently in the third daily cycle of the second intermediate cycle of the yearly cycle.

Here are some points to consider:
1) The yearly cycle is typically comprised of 2 intermediate cycles.
2) A failed daily cycle signals an intermediate cycle decline with the expectation of left translated daily cycles printing until the intermediate cycle low.
3) Left translated daily cycles peak on or before day 8 (often before).

If the dollar forms a swing high tomorrow, then the daily cycle may have peaked. If the daily dollar cycle has peaked then the dollar will continue into its intermediate cycle low. Since this is the second intermediate cycle of the current yearly cycle then the chances that the dollar will also seek out its yearly cycle low.

If so, then in regards to the dollar

If a daily swing highs forms …

… it might just be time to…

… put a fork in it.