Cycle Trading

The dollar’s daily cycle formed a swing high on Friday off of Thursday’s print.

Friday was day 17 and the dollar breached the 83.60 support level. The dollar enters its timing band for a low on Monday. Any downside follow through will likely signal that the dollar has entered its daily cycle decline. With a day 16 peak, this cycle will likely form as a right translated daily cycle which means we can expect the next daily cycle print a higher high.

Stocks

The equity daily cycle peaked on Wednesday day 24 and then formed a swing high on Thursday that produces a trend line break and a breach of the 10 MA (not shown). Most daily cycles form a low every 30 – 45 days so if this a daily cycle decline then we should expect to see at least another week of decline.

So far, this has fulfilled most of the requirements for a daily cycle low. However, if Thursday was the D.C.L. it is early of the normal timing band and RSI 5 did not become oversold. But if equities have entered their blow-off phase of the this QE inspired 4 year cycle then this might be as much as a daily cycle correction that we will see. Especially if you consider the B.O.W. print from late Friday.

That’s a big number. Now I know that we should not be “setting our watch” to the B.O.W. or S.O.S. prints. But considering that the dollar looks to be rolling over into a daily cycle decline, we could very well see a shortened daily equity cycle.

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