Cycle Trading

Dollar delivered an oversold bounce on Thursday

The dollar is in the timing band for a low. It will likely print a daily cycle low over the next 4 – 6 days. Since the dollar printed a higher low on Thursday it could be day 1 or day 22. If Wednesday stands as the daily cycle low then the dollar has to travel almost .90 to form a swing low. However, I think that today was a breather and we are likely to get one more push lower. The Selling on Strength numbers on the dollar seem to suggest that as well.

A 38 print on UUP is a rather large number. Should the dollar break marginally past Wednesday’s low it will ease the parameters to forming a daily cycle low. With the dollar on week 13 of the intermediate cycle and new daily cycle should roll over quickly into a left translated daily cycle.

Despite the dollar being up today, the CRB continued higher out of its daily cycle low.

We see that the CRB pierced the declining cycle trend line signaling that the new daily cycle has launched. I would like to see the CRB close above the declining trend line in a clear and convincing fashion to confirm then new daily cycle. If the dollar’s daily cycle low is still ahead of us then we will likely to see a bullish follow through on the CRB.

Stocks also continued higher today, but then reversed lower into the close.

Because of the aging yearly cycle our cyclical expectation is for the current daily equity cycle to form as a left translated cycle. A peak before day 20 would indicate a left translated nature to the daily cycle. Thursday was day 16 for the daily equity cycle. A swing high here could lead to a daily cycle decline. A break below 1722.20 forms a daily swing high.

If stocks enter into a left translated daily cycle decline, that could send more money into precious metals.