Cycle Trading

This past week saw the dollar begin its daily cycle decline.

The daily cycle peaked on day 16 and formed a swing high on day 17. The 83.50 did not surrender support until Thursday. The dollar sliced through support and was halted by the daily cycle trend line.

The daily cycle trend line also happens to intersect the 83 level of support. A break below that will the dollar dive into its daily cycle low. The dollar is already in its timing band for a daily cycle low. Once a trend line break occurs, any swing low formed could mark the daily cycle low.

With a day 16 peak, the odds are that this cycle will form as a right translated daily cycle. If so, our expectation would be to see the next daily cycle print a higher daily cycle high.

Stocks

The daily equity cycle peaked on day 24 and formed a swing high on day 25. Then stocks were caught in a mini triangle consolidation until Friday.

Friday saw stocks break to the downside signaling that the final daily cycle decline has begun. At day 30, the timing band can stretch for 3 weeks. With a 24 day peak, unless this is a stretched cycle this should form as a right translated daily cycle. And if that is the case then we should see one more intermediate cycle that prints a higher daily cycle high.

This is the fourth daily cycle for the current intermediate cycle. A correction to about 1600 would find a support level as well as tagging the intermediate cycle trend line. Should that trend line fail during this daily cycle then that would signal the intermediate cycle decline has begun.

However, a swing low accompanied by a break of the declining (red) trend line should mark the daily cycle low and signal one more daily cycle for the current weekly cycle.

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