Cycle Trading

The daily equity cycle peaked on day 8 and has been in decline since. Our expectation is to see this cycle form as a left translated cycle that will break below the previous cycle low, signaling an intermediate cycle decline.

The big day that stocks had on Tuesday may change our expectation.

Should stocks follow through on Tuesday and break above 1845 they will break above the declining trend line. Then the likelihood of a failed left translated cycle diminishes. And instead that would signal that Monday was a half day cycle low.

The dollar may have pitched another curve ball at us.

The dollar’s daily cycle had peaked on day 8. A swing high and trend break occurred to signal a daily cycle decline. Now this morning the dollar is up and is threatening to break above the declining trend line. A break above the declining trend line indicates that the dollar has left behind another 11 day daily cycle low.

We see that gold has formed a swing high and trend break in the overnight. That signals that daily gold cycle has peaked and will decline into a daily cycle low. We cannot say with certainty that a peak on day 9 will result in a left or right translated cycle.

But the Miners may give us a clue.

The Miners daily cycle formed another higher daily cycle high on Tuesday, which was day 16. A peak on day 16 does shift the odds of this cycle forming in a right translated manner.

The bearish reversal the Miners printed indicates a decline into a daily cycle low is at hand. A break below 22.05 forms a swing high. Then a break of the daily cycle trend line confirms the decline into a daily cycle low.