Cycle Trading

Friday was day 7 for the daily dollar cycle. The dollar is in the second daily cycle of the current intermediate cycle.

Since the previous daily cycle failed, our expectation is to see left translated failed daily cycles until the intermediate cycle low. Left translated daily cycles typically peak on or before day 8. The dollar has entered a resistance zone. A swing high will likely send the dollar into a daily cycle decline. That decline should break below the previous daily cycle low.

Stocks

Monday was either day 45 or day 12 of the daily equity cycle.

If Monday was day 12, that would mean the day 34 marked a daily cycle low and we are now in the failed 5th daily cycle.

A other possibility is that Monday was day 45 making Friday day 4 of a new daily cycle. Why this scenario is appealing is due in part to the big Buying on Weakness prints over the past two weeks.

There were some big B.O.W. numbers on Friday. The one that I pay attention to is the B.O.W. for the SPY. Friday saw a 281 million B.O.W. print for the SPY. While that, in of itself, is noteworthy, I feel it is even more significant when you consider the B.O.W. numbers over the past 2 weeks.

June 20th and 21st saw about 700 million print for B.O.W. Add to that the 281 on Friday and that is ab out 1 billion B.O.W. These are the type of B.O.W. numbers that are more what I would expect for an intermediate cycle low, not a daily cycle low.

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