Cycle Trading

Wednesday was day 25 for the daily equity cycle and stocks broke to a new high.

Peaking on or after day 25 is significant because it virtually locks up a right translated nature to the daily cycle. Which means that this daily cycle is likely to print a higher low. Or to say it another way, the possibility of forming a failed daily cycle has now diminished substantially.

The current daily cycle seems likely to print as a right translated cycle. Allowing for 2 – 4 weeks to conclude this daily cycle will take the weekly cycle out to weeks 22 – 24. That signals that this intermediate cycle should then stretch out to 30 weeks plus to allow for one more daily cycle. The expectation for that daily cycle will be to print a higher cycle high, form as a left translated cycle that fails, leading into the intermediate cycle low.

The dollar formed a swing high today and also broke below the daily cycle trend line.

Wednesday was day 13 for the daily dollar cycle. The dollar peaked on day 10. A day 10 peak tends to shift the odds for this daily cycle to form as a right translated daily cycle printing a higher daily cycle low.

Gold just may have printed a daily cycle low on Tuesday. Wednesday saw gold form an inside day, closing near the high of the day. A break above 1285.2 forms a swing low. And if Tuesday holds up as the low, then gold would have printed a left translated cycle that still formed a higher daily cycle low.

The Miners still look as though they printed their daily cycle low on Friday. A swing low formed on Monday but the Miners have been contained by the declining cycle trend line. A break above the declining trend line confirms Friday was a daily cycle low.

A daily cycle low looks to have been left behind for Bonds on Monday, which was day 18. Bonds formed a swing low on Wednesday off the Monday candle. Notice that bonds broke below their intermediate trend line last Thursday, signaling an intermediate cycle decline. Bonds are currently on week 12 of the intermediate cycle. Since it is still early enough in their intermediate cycle, it is likely to see one more failed daily bond cycle. That sets up an expectation to see this new daily cycle peak on or before day 8 before bonds roll over into a failed daily cycle.