Cycle Trading

The Dollar
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The bearish reversal and swing low printed last Friday and Monday respectively looked in real time as if the dollar began its daily cycle decline. However, there was no bearish follow through.

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The dollar broke to a new daily cycle high on Friday, then reversed lower. Friday was day 22 for the dollar’s daily cycle. The dollar is already in its timing band to print a daily cycle low. After a brief decline into a daily cycle low we can expect the new daily cycle to peak early and then roll over into an intermediate cycle decline.

Stocks
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Our normal cyclical expectation is to see the first daily cycle of a new intermediate cycle form in a right translated manner. The peak on Thursday, day 21, makes it likely that this daily cycle will form as a right translated cycle.

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Friday was day 22 for the daily equity cycle. The timing band for a daily cycle low runs from day 30 to day 45 so there is plenty of time for stocks to make another push higher. But there are a few signals that indicate that the daily cycle decline is near.

The CCI delivered a bearish 100 line crossover. The TSI is about to deliver a bearish crossover, as well. Also the 3.384 billion in Selling on Strength indicate a correction is near.

A swing high accompanied by a trend line break will signal the daily cycle decline. Due to the way this daily cycle has formed there is not a clear trend line to use. So we will default to a close below the 10 day MA along with a swing high. A break below 2030.44 forms a daily swing high.

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