The 5/17 13 Weekend Report Preview

May 19, 2013

I want to start off the report by looking at the yearly dollar cycle.
The dollar tends to print a yearly cycle low every 8 – 13 months.

The dollar is currently on month 8 of the yearly cycle. I think that we will likely see the dollar print a higher monthly high in June and then begin its yearly cycle decline taking it into September.

By September the three year cycle will be at month 30. There is a chance that the gravitational pull from the coming three year low could extend this yearly cycle out past September therefore extending this yearly cycle. Considering that the 2 previous yearly cycles ran on the short side, we could see this balance out with a longer yearly cycle.

Stocks

The daily equity cycle set a new daily cycle high on Friday, 21. That means that this daily cycle will likely print as a right translated daily cycle.

This is the fourth daily cycle of the current intermediate cycle. Intermediate cycles tend to be comprised of 3 -4 daily cycles. Since this daily cycle seems to be forming as a right translated daily cycle, then equities will likely require a 5th daily cycle to form as a left translated daily cycle to conclude this intermediate cycle.

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3 responses to “The 5/17 13 Weekend Report Preview”

Forex Kong

May 19, 2013

Hey “Likes money” – fantastic cycle work good man – just great.

A question – Considering that USD has now made a “higher high” and essentially broken the longer term downtrend – would you not have to consider that the next low will likely be a “higher low” (not lower than 79.00 area)- and in turn suggest that any idea of “the dollar tanking” longer term is out the window?

We’d be looking at a macro trend change here – and consider longer term that USD would continue to make higher highs and higher lows no?

Reply
1. likesmoneystudies
  
  May 19, 2013
  
  Forex Kong,
  
  Thanks, it’s nice to hear from you.
  I believe that the dollar cycles through a 15 year super cycle that is embedded with five- 3 year cycles.
  I think that a macro change occurred in March of 2008, which was a 15 year super cycle low.
  I discussed this recently: https://likesmoneycycletrading.wordpress.com/2013/05/14/its-all-about-the-dollar/
  So the first 70 – 100 months of this 15 year cycle should be wildly bullish for the dollar and the dollar should be printing higher 3 year cycle highs and higher 3 year cycle lows.
  I point out in the above post that the dollar has failed to make a higher 3 year cycle high since 2001.
  Granted that the final two – 3 year cycles of the previous super cycle should form as lower three year cycle highs.
  The point is that since the March 2008 super cycle low, the dollar is STILL printing lower three year cycle highs.
  The first three year cycle had a high of 88.57 in March of 2009
  The dollar is now in the second 3 year cycle and the current three year cycle high is 84.37.
  
  Now let’s turn our attention to the current yearly cycle and current intermediate cycle.
  As noted in this weekend’s post September marked the yearly cycle low and now the dollar is on month 8 of its yearly cycle.
  
  This is now the 3rd intermediate cycle of the current yearly cycle. Yearly cycles are normally comprised of 2 to 3 intermediate cycles.
  
  Following a right translated weekly cycle the expectation was for this cycle to print a higher weekly cycle high, which it accomplished this week.
  With the expectation that this is the terminal intermediate cycle for the yearly cycle then this weekly cycle should form as a left translated, failed weekly cycle.
  If this weekly cycle runs the average length of 20 weeks that will take it into September to print the intermediate and yearly cycle low.
  
  So while I cannot say how high the dollar will rally, I believe that the dollar will give up the April pivot of 81.33 on the way down to a yearly cycle low.
  
  Now should the dollar break above the previous three year cycle high of 88.57 during this three year cycle, then the macro change that began in 2008 is still in effect.
  However, if that does not happen then the dollar would continue to print lower three year cycle highs.
  
  Reply
  1. vorfahrt
    
    May 20, 2013
    
    LM- thanks for another amazing WE report. While the US$ is still undecided from a longterm perspective, I think the intermediate picture is clearing up as following: US$ down to a yearly low (although higher IMO), commodities up to a bear market rally, bonds down to a yearly low and stocks up to a blow-off top. This should all happen some time next spring. Then we should also finally have a situation where a recession or at least a meaningful slowdown could happen in the economy. Before this could happen we need an interest rate spike, which we have not had since 2008. Likewise, we would need to see consumer confidence go higher before a meaningful stock market top and economic recession can hit. But the interest yearly cycle pointing to finally higher interest rates could finally show us a way. But we’ll see some good fireworks beforehand and I’m focused on that now! Let the fireworks begin!