Cycle Trading

The dollar formed another higher high on Friday, which was day 16 of this first daily cycle. This has locked in a right translated nature to this daily cycle. The dollar is 2 days shy of entering its timing band for a daily cycle low. The bearish reversal on Friday eases the parameters to form a swing high. A break below 80.49 forms a swing high and a break below the daily cycle trend line confirms the daily cycle decline.

http://postimg.org/image/xd3z7dihr/

I believe that the dollar must reveal its intentions of its three year cycle status during the next daily cycle. Should another right translated cycle form, then the likelihood shifts towards the three year cycle low has already been left behind. Regaining the 200 day moving average would deliver further confirmation of a new three year cycle. However, a left translated, failed daily cycle keeps alive the possibility of the three year low still being in front of us.

Stocks

Stocks printed an ugly bearish engulfing candle on Friday.

http://yfrog.com/2hxoluj

Generally speaking, surprises should confirm the trend. Meaning in an uptrend surprises should come to the upside and in a downtrend surprises should come to the downside. Stocks have been in an uptrend for the past 22 months. Friday’s print is a warning that this daily cycle can quickly develop into a failed daily cycle.

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