Cycle Trading

The past 5 trading days saw stocks recover the decline from the previous 14 days.

Wednesday was day 5 for the daily equity cycle. Stocks broke above the resistance from the August pivot. Stocks seem to be well on their way to fulfilling our cyclical expectation of printing a higher high following a right translated cycle.

Meanwhile the dollar also printed a higher high on Wednesday. Wednesday was day 9 for the dollar’s daily cycle. Now that the dollar has printed a higher high past day 8, the odds begin to shift toward this daily cycle forming as a right translate daily cycle.

But tonight I wanted to look at the weekly dollar chart. The dollar may have printed an early intermediate cycle low on week 15. A break of the declining intermediate cycle trend line will confirm week 15 as the intermediate cycle low. If the daily cycle rolls over prior to that, it may still form as a left translated cycle.

Wednesday was day 11 for the CRB Index. The current daily cycle peak occurred on day 5 at 288.71. The CRB will need to break above 288.71 to lock in a right translated nature to this daily cycle and signal that a new intermediate cycle has begun.

We are still on the watch for a new daily cycle for bonds.

Last Friday saw bonds form a swing low. They failed to break above the declining trend line to confirm a new daily cycle. Wednesday bonds had big day gaining 1.25% and closing right at the hight of the day. A break above 105.86 forms a swing low. Still, we need to see the declining trend line break to confirm a new daily cycle.