Cycle Trading

By definition, the dollar printed a swing low on Friday.

Friday’s candle printed a higher high and a higher low over Thursday’s candle and so by definition Friday printed a swing low. Since Thursday was so late in the timing band for a daily cycle low, it does have a good possibility to mark the daily cycle low. Certainly the dollar will need to provide some follow through.

Besides being so late in the timing band, Thursday saw the dollar tag a significant support/resistance level. Still we need to see a break of the declining trend line before we declare a new daily cycle.

This is the first daily cycle of a new intermediate cycle. Since this cycle failed (broke below the previous low) that signals that the intermediate cycle is in decline. All subsequent daily cycles then should also fail. Once a new daily cycle is confirmed, our expectation is to see a left translated daily cycle peaking on or before day 8.

Stocks

Stocks printed a daily cycle low on Thursday, June 6th. A swing low and declining cycle trend line break printed last Friday confirming a new daily cycle.

Stocks seem to be struggling to regain the 1640 level. If stocks break lower and breaching the developing daily cycle trend line, that will spell trouble.

This is the 5th daily cycle of the current intermediate cycle. Following a right translated daily cycle we should see this cycle print a higher high before rolling over. However, should stocks break the developing trend line as mentioned above that would also breach the intermediate cycle trend line signalling an intermediate cycle decline.

I want to remind you that while our expectation is to see a higher daily cycle high, last year we did not see that before rolling over into a yearly cycle decline.

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