Cycle Trading

The yearly commodity cycle peaked in September and has been in a bear market since.

The CRB Index printed a daily cycle low on 6/28. On Thursday, day 8, the CRB has closed above the 50 MA for the second straight day. The CRB has been very bullish since 6/28 by rallying 7 out of 8 days. The strength out of this low looks like an intermediate cycle low has been left behind.

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The CRB printed its previous yearly cycle low in June, 2012. It’s been two weeks since the 6/28 low. The CRB has already formed a weekly swing low and is now challenging the declining weekly cycle trend line. A break above confirms a new intermediate cycle and quite likely a new yearly cycle.

With the CRB on the verge of confirming a new yearly cycle, lets take a look at the “commodity currencies” to see if they are in sync.

The Australian Dollar prints a yearly cycle low on average every 11.7 months. The Canadian Dollar prints one on average every 11.8 months. Both currencies are sitting on month 13 of their yearly cycle and each have breached the lower monthly Bollinger Band.

AUD prints an intermediate cycle low just about every 15 weeks on average and the CAD prints one every 16.6 weeks on average.

The AUD is printing a bullish reversal on week 17 where the CAD has formed a weekly swing low this week.

So the CRB appears ready to confirm a new intermediate and likely a new yearly cycle. And the “commodity currencies” appear to be doing the same.

Things appear to be gearing up for a bullish run …