Cycle Trading

Here is an excerpt form the Weekend Report Regarding Bonds.

Bonds gave a surprise on Friday and I want to draw your attention to it.

The daily bond cycle peaked on Wednesday, day 14.
On Friday bonds fell out of bed.

The dramatic drop formed a swing high and delivered a convincing trend line break.

A day 14 peak gives pretty good odds that this cycle will form as a right translated cycle

We were anticipating that bonds would roll over into a daily cycle decline. The surprising thing was the severity of the drop. Prior to Friday’s plunge, my expectation would have been for a 4 – 8 days correction, printing a higher low. Now, we will need to keep a keen eye on the previous daily cycle low. A break below that low would signal that the intermediate cycle is in decline.

Bonds formed a weekly swing high this week.

This was week 8 for the weekly bond cycle. While bonds have not broke below the weekly cycle trend line despite this past week’s drop, further weakness next week could see a trend line breach. This is the first weekly cycle of the new yearly cycle and quite frankly I was anticipating this cycle to form as a right translated cycle. A trend line breach would signal that the intermediate cycle is in decline.

Bonds formed a yearly cycle low in March. A monthly swing low and trend line break printed in April. May is month 2 for the new yearly cycle.
At this early in the yearly cycle should the daily cycle fail signaling a left translated weekly cycle is developing, then the yearly cycle would be in