Cycle Trading

The Dollar pierced the upper Bollinger Band on Friday, which was day 7 for the daily dollar cycle.

The current daily cycle followed 2 left translated, failed daily cycles. Quite frankly I was expecting this one to fail as well. On Friday the dollar broke above the previous daily cycle high confirming a new daily and new intermediate cycle.

First daily cycles of new weekly cycle tend to be right translated, peaking after day 13. However, after breaching the upper Bollinger Band the dollar has in the past reversed. So while cycles suggest the dollar should still go higher, the technicals suggest that we need to keep an open mind to a reversal.

Stocks

Friday was day 16 of the fourth daily cycle of the current intermediate cycle.

If this fourth daily cycle is the last daily cycle of the current intermediate cycle, then it should peak on or before day 20 in order to form a left translate daily cycle. However, stocks appear to be consolidating the recent push higher and we may still see another surge higher, taking equities past day 20 and forming a right translated daily cycle.

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