Cycle Trading

We discussed yesterday that bonds were in the timing band for a daily cycle low.
They formed a swing low today.

Wednesday was day 24 for the daily bond cycle, which is toward the later end of the timing band for a DCL. Thursday saw bonds form a swing low. A break above the declining cycle trend line confirms a new daily cycle.

Since bonds printed a lower daily cycle low, they are in an intermediate cycle decline. At week 10, the weekly cycle can run for another 10 weeks. All daily cycles should form as left translated daily cycles until an intermediate cycle low prints.

Therefore our expectation is for this daily cycle to form as a left translated daily cycle and should peak on or before day 8.

We saw equities react to bonds by selling off today.

Thursday was day 20 for the daily equity cycle. I think that we will see some weakness in stocks as bonds rally. That should allow stocks to sink into a half cycle low. Once the daily bond cycle peaks, I expect one more leg up for the daily equity cycle.

The dollar formed a swing high today.

Wednesday was day 11 for the daily dollar cycle. The dollar poked through the Bollinger band for a second straight day while forming a swing high. At this point we do not know if the dollar will rollover into a daily cycle low or not. The dollar will not enter the timing band for a DCL for another 7 days.

But since the dollar is in the third intermediate cycle of the yearly cycle our expectation is for this cycle to form as a left translated weekly cycle.

While it is possible that the dollar topped today, it does look like gold printed a daily cycle low today.

Thursday was day 22 for the daily gold cycle. Gold printed a Bollinger band crash today. At 22 days, gold is in the timing band for a daily cycle low. A break above 1398 forms a swing low. If today proves to be the DCL gold would have formed a right translated daily cycle printing a higher low.

Printing a higher low would be the first first confirmation that a yearly cycle low was left behind.

And if that is the case then…

… maybe it is time for that sleeping bull to awaken …