Cycle Trading

The dollar sold off in a dramatic fashion on Thursday on news of a new budget deal. The dollar broke below the previous daily cycle low on Thursday forming a failed daily cycle. The dollar continued lower on Friday.

Friday was day 11 for the daily cycle. The dollar has another 7 days before it enters its timing band for a daily cycle low. After such a steep sell off on Thursday we need to be prepared for an oversold bounce before the dollar continues seeking its daily cycle low.

This intermediate cycle began with a strong surge higher in June. But the decline has been characterized by surprises to the downside. This is currently the 5th daily cycle of this intermediate cycle.

Stocks

Stocks broke out to all time highs on Thursday and followed through higher on Friday.

Friday was day 7 for the daily equity cycle. While stocks are at all time highs, their is a bearish divergence developing on the True Strength Indicator.

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