Cycle Trading

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The dollar continued its emergence out of its three year cycle low by posting a 93 cent gain on Thursday.

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The higher high on week 17 locks in a right translated nature to this intermediate cycle. Which means we will expect the next intermediate cycle to go on to print a higher intermediate cycle high.

It is interesting to note that the EURO is now on week 21 and it is in its timing band to print a weekly low, which should happen when the dollar begins its intermediate decline. As we will see below, the dollar has locked in a right translated nature to the current daily cycle. Therefore the earliest we can expect the to see a left translated daily cycle form for the dollar will be the next daily cycle.

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A new high on day 18 means that the dollar is now in its timing band for a daily cycle low which can last up to two weeks.

As we noted above, the dollar is on week 17 of its intermediate cycle, I believe that the huge bearish TSI divergence is signaling an impending intermediate cycle decline.

So I think that we will see a brief decline by the buck followed by a brief rally (8 days or less) which will lead into the intermediate dollar decline.

The Miners finally filled the gap that they left behind in June.

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So while the dollar has printed its highest high in over a year, the Miners have only given back its gains from the last three months and is still holding above the 200 day MA. And despite the Miners being at its lowest point in close to three months this is a bullish divergence developing on the TSI which is a pre-bullish signal. A reversal off the 200 day MA could mark the daily cycle low.