Cycle Trading

Stocks broke out to all time highs today.

Tuesday was day 8 for the daily equity cycle. Stocks fulfilled our expectations by printing a higher high following a right translated daily cycle. And by doing so, stocks broke out to all time highs.

We discussed last night that the dollar’s decline should provide a lift to equities.

The dollar did decline again today, breaking below the previous daily cycle low. This is now the second failed daly cycle in a row. The dollar is descending into an intermediate cycle low and quite likely the yearly cycle low.

At day 8, the dollar still has 8 – 15 days to print a low, so the trend is lower. However, there is a Bollinger Band crash today and we could very well see the dollar rise a bit. If that happens that will likely set the declining cycle trend line.

The Miners responded to the lower dollar.

The Miners opened lower today. After testing the daily cycle trend line they reversed higher. Wednesday was day 9 for the daily Miner cycle. The Miners need to rally at least to day 12 to shift the odds that this is a right translated daily cycle.

There was some selling on strength today

You will notice both the SPY and AAPL printing SOS numbers.

The SPY was not large and almost expected as stocks broke to new highs.

AAPL’s print is big. I find it interesting that it comes on the heals of its announcement of a record $17 billion bond deal