Cycle Trading

The dollar has rallied out of its daily cycle low and now sits at day 8. The dollar bounced off the developing trend line but it is still being contained by the declining 50 day MA.

We should see the dollar choose a direction soon. A close above the declining 50 MA continues the possibility that the October pivot was the three year cycle low. A break below the trend line signals a possible failed daily cycle is in progress, which then keeps alive the scenario of the three year low is still out in front of us.

We discussed these two scenarios previously here.

If the dollar’s cycle were to roll over into a cycle decline that would fit in with what is developing with the Miners.

The Miners formed a swing low on Tuesday and followed through with a clear and convincing break of the declining trend line today. Which makes Tuesday day 2 of a new daily cycle. The True Strength Indicator formed a higher low, which usually occurs at an intermediate low.

The earliest that a weekly swing low can form would be next week since this week saw its lowest point since the week 12 peak. However the Miners are testing the declining trend line. A clear and convincing break of the declining weekly trend line would confirm a new intermediate cycle.