Cycle Trading

By recognizing July 11th as the daily cycle low allowed for the true declining cycle trend line to emerge. On day 3, July 16, the dollar broke below the July 11 low, producing a failed daily cycle.

The declining trend line was breached on Wednesday, as the dollar printed its daily cycle low. The dollar formed a swing low on Thursday in a clear and convincing manner to declare a new daily cycle.

The dollar peaked on day 2 of the previous daily cycle, it has since been held below the 50 MA. Seeing that the previous daily cycle failed, our expectation is to see left translated, failed daily cycles until the intermediate cycle low. Friday’s rejection by the 50 MA signals trouble for the buck. A break below 81.82 forms a swing high and could mark the peak of this daily cycle. That syncs up with what we see unfolding on the weekly cycle.

(Editor’s Note: Friday’s low was 81.82)

Stocks

This week the daily equity cycle rallied out of the day 23 half cycle low and formed a new all time high on Friday, day 28.

The new high on day 28 locks in a right translated nature to this daily cycle. The daily cycle runs about 35 – 45 days which leaves plenty of time for another leg higher. We can expect that the daily cycle decline to hold above the previous daily cycle low and the next daily cycle to print a higher high.

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