Cycle Trading

So today was day 29 for the daily equity cycle and stocks printed a reversal that pierced the lower Bollinger Band.

A break above 1662.47 forms a swing low. Then we will need to see a break of the declining trend line to confirm a new daily cycle. While a day 29 low may be a tad early for a daily cycle low, it is not without precedent as you can see below.

The first daily cycle emerging from the November 2012 intermediate cycle low did form as a 29 day daily cycle.

Getting back to the current daily cycle, if today stands as the daily cycle low then it forms as a right translated cycle. Our framework was expecting a left translated cycle that leads into an intermediate cycle decline.

Well equities may have thrown us a curve ball on this daily cycle. But we will need to keep our eye on the ball because it appears that the intermediate decline has already begun.

Stocks are currently on week 15 of the intermediate cycle. The decline this week has caused stocks to break below the intermediate cycle trend line. That signals an intermediate cycle decline. So if a new daily cycle begins tomorrow, it should lead into the intermediate cycle low.

Now here is something that I am keeping my eyes on.

The dollar printed a 32 left translated low last Thursday. Wednesday was day 4 of the new dollar cycle. The dollar backtest the yearly low and retreated. While it is unclear if this new daily cycle is also a new intermediate cycle, a swing high forming here would confirm that this daily cycle is part of the ongoing failed intermediate cycle.

I find it no coincidence that the dollar was rejected at the previous yearly low and the Miners printed a reversal.

Wednesday was day 17 for the daily Miner cycle. The Miners tagged the lower Bollinger Band and reversed higher into the close. A break above 24.16 forms a swing low. Then a break above the declining trend line will confirm a new daily cycle.