Cycle Trading

The daily cycle peaked on day 20. Soon after forming its swing high it lost the 200 MA. Then a few days later, the dollar broke below the previous yearly cycle low in a dramatic fashion on Fed Day. After a miner oversold bounce the dollar continued lower through Thursday. Friday saw the dollar print a swing low and declining cycle trend line break.

Thursday was day 32 for the daily dollar cycle. The swing low and trend line break on Friday makes Thursday very likely a cycle low. A daily count of 32 makes this an extended daily cycle. When the dollar prints an extended left translated, failed daily cycle it has a tendency of also forming an intermediate cycle low. You will notice that the yearly cycle low printed in June followed an extended 35 day failed daily cycle.

Stocks

The daily equity cycle peaked on day 15 and has been in decline since.

Friday was day 26 for the daily equity cycle and we see that stocks have been crawling along the 50 MA for the past week. Stocks are still shy of the timing band for a daily cycle low. Also factor in that crawling patterns tend to be continuation patterns. It is likely that we will see stocks break lower into its final daily cycle decline.

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