Cycle Trading

The dollar continued lower today.

Wednesday was day 30 for the daily dollar cycle. This marks the fourth day out of the last 5 that the dollar has breached the lower Bollinger Band. The dollar is getting late in the timing band and should produce a swing low soon. A break above the declining trend line would confirm a new daily cycle. This is the first daily cycle of a new intermediate cycle. Since this daily cycle as failed, all succeeding daily cycles should also form as left translated daily cycles that fail. Therefore once a new daily cycle is confirmed, we will likely see that roll over quickly.

Stocks were down today which continues a positive correlation with the dollar.

Last Thursday was day 34 for the daily equity cycle. Friday saw stocks print a swing low and delivered a trend line break declaring this a new daily cycle. This being the 5th daily cycle of the current intermediate cycle sets an expectation for this cycle to peak early (before day 20) before rolling over into an intermediate and quite likely a yearly cycle decline. I just don’t think that it will roll over tomorrow. I believe that there is a good chance that stocks will get pushed to all time highs, breaking the 1700 level.

There was a mild Buying on Weakness number today of 72 million which signals that there is still some life left in this bull. I don’t expect to see any large BOW numbers with stocks being so late in the timing band for a weekly cycle low. In fact I believe before too long we will start to see some big numbers print for the Selling on Strength. I think that once the dollar begins a new daily cycle we will see stocks rally.

Gold did manage to rally today.

Tuesday was day 15 for the daily gold cycle. Today saw gold form a swing low but stopped at was looks to be a mini declining cycle trend line. A break above this mini trend line would signal a new daily cycle. Breaking above the previous daily cycle high of 1423.60 confirms a new daily cycle.

The Miners may have printed a daily cycle low today.

Wednesday was day 16 for the daily Miner cycle. The Miners did make a lower low before reversing and closing higher. A break above 267.31 forms a swing low. If Wednesday proves to be the daily cycle low then the Miners would have printed a right translated daily cycle with a higher low.

And printing a higher low means that more pieces to the bullish framework are coming together …

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