Cycle Trading

The new daily dollar cycle continued higher printing its 5 straight higher closing high.

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Thursday was day 5 for the daily cycle. Since this is following a right translated cycle our expectation is to see the dollar go on to print a higher high during this daily cycle.

Stocks

Stocks have done a masterful job obscuring the daily equity cycle count lately. March 27th was day 35 for the daily equity cycle. It met the criteria for a daily cycle low and we labeled it as such. After a spike up stocks declined into a lower low on 4/11. The evidence is piling up to support 4/11 as an extended daily cycle low.

http://postimg.org/image/uyt0exjex/

After the day 35 low, stocks peaked on what would have been day 6 and then declined into a lower low. If day 35 was the daily cycle low, then 4/11 would have been day 11 of a new, failed daily cycle. If the daily cycle failed, then we should not see stocks break above the declining trend line. The break above the declining trend line is characteristic of stocks emerging out of a daily cycle low. Which makes Friday day 4 of a new daily cycle. And what we see on the NASDAQ helps to confirm this view.

http://postimg.org/image/6d2hx1lzd/

The NAS printed what looked to be in “real time” a 35 day daily cycle low. The subsequent break of that pivot looked as if the new daily cycle failed. But, the strong rebound off the 200 MA supports the notion that the NAS printed a daily cycle low on Tuesday. There is a bullish divergence developing on the TSI. A break above the declining trend line will confirm the new daily cycle.

And the bigger picture of the NAS foreshadows what I believe is in store for the equity market, which I discuss further in the member’s report.

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