Cycle Trading

Bonds have been caught in the grips of a severe sell off since May 1st.
Today bonds caught a bid and printed an impressive reversal.
So where does that leave the daily cycle?

In the Weekend Report we discussed bonds and pointed out that a daily cycle low may have been printed on 5/15. You will notice the TSI bullish crossover on 5/15 that also supports this notion. At day 24, May 15th was in the timing band for a low. The swing low had a good chance of marking a daily cycle low. Then bonds peak on day 1 (May 16) and went on to form as an extremely left translated daily cycle. The bullish reversal today has eased the parameters for forming a swing low. A break above 113.96 forms a swing low.

Bonds are currently on week 14 of the intermediate bond cycle. Should a new daily cycle form here, it could also signal a new intermediate cycle as well. I will point out that 61% of intermediate cycles for Bonds print between 14 and 22 weeks. A break above the declining weekly trend line would confirm a new intermediate cycle. Since I believe that March was a yearly cycle low (as discussed in the Weekend Report) then bonds are already in a failed yearly cycle and the next weekly bond cycle should also form as a left translated cycle.

Unlike bonds, the dollar crashed today.

This is the third time in four days that the dollar has crashed the lower Bollinger Band. At 29 days, the dollar is due for a daily cycle low. (Perhaps bonds are foreshadowing a bounce for the dollar). The dollar has been in decline since the day 16 peak. A swing low and a trend line break are required to confirm a new daily cycle. A break above 81.75 forms a swing low.

And now a word from our Miners

The Miners broke below the daily cycle trend line today filling the gap left behind on May 30th.

If May 20th was the yearly cycle low, then this cycle should form as a right translated daily cycle. For that to happen the Miners will need to form a swing low in the next three sessions.

And if this does form as a right translated daily cycle then …
The 301 level could be targeted for the next gap fill …

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