Cycle Trading

The dollar is declining into a daily cycle low. Since the last daily cycle failed (broke below the previous daily cycle low) that signaled the the current intermediate cycle is in decline. Therefore we expect all subsequent daily cycles to form as failed, left translated daily cycles until an intermediate cycle low prints. A break below 81.71 delivers a failed daily cycle. With a timing band for a low 18 – 25 days leaves at day 9 the dollar could decline for another 9 to 16 days.

This is the third daily cycle of the current intermediate cycle. Potentially there is room for at least one more daily cycle to unfold after this current daily cycle. Since this is the second intermediate cycle for the yearly cycle, It is likely that the dollar is also in a yearly cycle decline. It will be hard for gold and equities to resist a yearly cycle decline for the dollar.

Monday was day 9 for the daily gold cycle. The low printed on 4/17 was quite likely the yearly cycle low. So it appears that gold is emerging from a yearly cycle low as the dollar is rolling over into its yearly cycle low. We will need to see gold print a right translated daily cycle to help confirm a new yearly cycle. Gold will need to rally past day 12 to shift the odds for this being a right translated daily cycle.

Stocks are also responding to the dollar rolling over. Monday was day 7 for the daily equity cycle. Stocks did close at new all time highs today. But the have yet to break above the previous daily cycle high as we are expecting since the previous daily cycle was a right translated daily cycle.

This is the 4th daily cycle of the current intermediate cycle. Many intermediate cycles run for 3 – 4 daily cycles. Which means that this current daily equity cycle could form as a left translated daily cycle. To do so it would have to peak by or before day 20.

Another possibility is that with the dollar seeking out a yearly cycle low that the current equity cycle forms as a right trnalsated cycle. If that happened then stocks would need a fifth left translated daily cycle to follow.

So we will need to keep a watch on the dollar decline …