Cycle Trading

On Friday the dollar formed a swing high and a trend line break off the day 8 peak. That signaled daily cycle decline.

Tuesday, day 11, was the lowest point since the day 8 peak. Wednesday the dollar rocketed higher. If Tuesday was in the timing band for a daily cycle low I would have little reservations of labeling it as a daily cycle low. However a break above the day 8 high 81.187 leave little doubt that Tuesday was an 11 day daily cycle low.

Stocks seem to be up to old tricks as well.

The daily equity cycle peaked on day 8. Day 9 delivered a swing high and a bearish cross on the True Strength Indicator. It looked as if this daily cycle was forming in a left translated manner that was consistent with our cyclical expectation. Then Wednesday saw stocks print a new daily cycle high. Stocks can still peak on or by day 20 and still have a good likelihood of forming as a left translated cycle. However a clear and convincing break higher here would swing the odds away from a left translated cycle to a right translated cycle forming here.