Cycle Trading

What appeared to be a failed daily cycle has now seen the dollar rally for three days and break above the declining intermediate cycle trend line.

So does this trend line break signal a new intermediate cycle? Maybe. Or maybe we need to review our cycle counts. If the dollar does continue higher and breaks above the 8/02 high that poses a problem with the 14 LT label for 7/31. That would be a problem because a cycle cannot fail and then go on to print a new higher cycle high.

So if the dollar does break above 82.49 then we will need to recognize 8/8 the daily cycle low. By recognizing 8/08 as the daily cycle low makes this a 20 day cycle, which is in the normal timing band for a daily cycle low.

Bonds appear to have another failed daily cycle in progress.

Bonds printed a left translated daily cycle low on August 1st. The daily cycle peaked on day 7 and today saw bonds break below the 8/01 low — signaling a failed daily cycle. With a daily cycle count at day 8, bonds could see 2 to 3 more weeks of weakness before printing a daily cycle low.

Stocks may have printed a daily cycle low today.

Stocks made a lower low today before printing a bullish reversal. That means that the earliest that a swing low can form will be Wednesday. A break above 1696.81 forms a swing low. Then a break above the declining trend line would signal a new daily cycle. Since this daily cycle will likely conclude as a right translated cycle, our expectation will be for stocks to go on to print new all time highs.