Cycle Trading

Bonds delivered a clear and convincing trend line break on Tuesday.

The trend line break on Tuesday confirms today as day 8 of the new daily cycle. Following a right translated cycle we can expect to see bonds go on to print a higher daily cycle high.

The CRB (finally) printed a swish high that followed an exhaustion reversal candle which printed on Monday. Tuesday was day 31 for the daily bond cycle. The CRB delivered a bearish crossover on the True Strength Indicator which indicates a daily cycle decline is beginning. A break of the daily cycle trend line confirms the daily cycle decline. But with it being so late in the cycle, we can expect a brief decline before going on to printed a new, higher daily cycle high.

I find it interesting that the CRB appears to have peaked on a day that the dollar printed a lower low. Perhaps the CRB is sniffing out one more push higher on the dollar.

Tuesday was day 4 for the daily dollar cycle. While the dollar printed a lower low, it appears to be forming a mini bull flag. In the short term, the next day or two, I think that we will see one more push higher on the dollar. But I expect that to be brief, with the dollar peaking on or before day 8. Then I expect to see the dollar roll over into another failed daily cycle, leading towards a failed intermediate cycle decline. And once this daily dollar cycle peaks we should see the CRB form a daily cycle low.