Cycle Trading

The markets did not do too much today except advance their respective daily cycle counts in anticipation of this week’s Fed meeting.

And I think that the dollar’s reaction will be the domino to set things in motion.

Monday was day 28 for the dollar’s daily cycle. The daily cycle peak came at day 14. So by printing a lower low on Monday means that the earliest that a swing low can form will be Tuesday. Also by pushing the cycle count out to day 28 has shifted this daily cycle from being right translated in nature to being neutral. A lower low for the buck on Tuesday will once again shift the nature of the cycle to being left translated.

The daily cycles for both gold and the Miners peaked last Tuesday and has since trended lower and now are testing their daily cycle trend lines. Both can still go higher, but will likely be short lived since they both are in the timing band to print a daily cycle low. A break of the daily cycle trend line signals the daily cycle decline has begun. The dollar rallying out of a daily cycle low is likely to knock them into a daily cycle decline. The bearish crossover on the TSI suggest that perhaps the daily cycle decline has already started.

The daily equity cycle sits at day 24. A break above 1698.78 will likely extend this daily cycle out into the 45 day range. But should stocks sell off on a rallying dollar then a break of 1676.03 confirms that the daily cycle is in decline.

So until the dollar busts a move, it seems that we will be treading water …