Cycle Trading

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The daily bond cycle peaked by printing a huge bearish reversal on day 20. Bonds printed their lowest point since then on Wednesday, day 30. Bonds broke higher today forming a swing low. The swing low signals that a 30 day, right translated daily cycle low printed. Which makes today day 1 of a new daily cycle

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Normally we would expect a right translated daily cycle to be followed up with the next daily cycle printing a higher daily cycle high.

However, bonds are currently in month 10 of their yearly cycle. Which means that they are in their timing band to seek out a yearly cycle low. In order for bonds to confirm their yearly cycle decline a failed weekly cycle is necessary.

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The intermediate bond cycle peaked on week 4. A weekly swing high formed on week 5 and this week has provided more bearish follow through. If, in fact, the intermediate bond cycle has peaked, then we should see failed daily cycles form until the intermediate (and yearly) cycle prints their cycle low. Therefore this new daily cycle that began today should peak on or before day 8, then roll over into a failed daily cycle decline.

At week 25, the dollar’s weekly cycle is beginning to get stretched as we wait on an intermediate cycle decline.

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Thursday was day 11 for the daily dollar cycle and the dollar broke out to a new daily cycle high. A day 11 peak certainly shifts the odds in favor of this daily cycle forming in a right translated manner. But with the weekly cycle at week 25, the dollar is getting late in its weekly timing band for an intermediate cycle low. So the dollar needs to reverse immediately in order to preserve the possibility of this daily cycle resolving as a failed daily cycle. A break below 86.07 forms a daily swing high. And a failed daily cycle would signal the intermediate cycle decline.