The bounce for the dollar after Fed day has been very weak and is having trouble trying to break above the resistance of the previous yearly low. And since Fed day was the lowest point of the daily cycle and there is no swing low in place we are unsure of the cycle count.
Fed day was day 21 for the daily dollar cycle. What we do know is on Fed day the dollar broke below the previous daily cycle low continuing the pattern of left translated failed daily cycles. The weak bounce and a failure to form a swing low may indicate the underlying weakness of the dollar.
Since the dollar broke below the previous yearly low, the dollar is now in a yearly cycle decline. Our expectation is for the dollar to continue to print left translated daily cycles. Once an intermediate cycle low is printed we can expect a right translated daily cycle. But after that, the dollar should still continue into its yearly cycle low.
Friday was day 21 for the daily equity cycle. Stocks have been in decline for the past 7 days. But since stocks did not break below the daily cycle trend line we are unsure if this is just a half-cycle low or stocks have begun their decline into their daily cycle low.
Friday saw stocks bounce off the daily cycle trend line, keeping alive the possibility for this being a half-cycle low. Our expectation for this daily cycle is to form as a left translated cycle due to the intermediate cycle picture. A bounce here does not negate this possibility. If stocks do form a half-cycle low and do not break out to new highs then a left translated cycle is still in play.
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