Cycle Trading

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The dollar broke out to a new 8 year high today.

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The dollar has just broke above the March 2009 pivot and is just a few ticks away from the declining 200 month MA.

The last three times the dollar was at this level it declined into either a major yearly low, 3 year low, or a 15 year low. The intermediate cycle is overdue for an intermediate cycle decline. And at 7 months the dollar has entered the timing band to seek out yearly cycle low.

The dollar may be running out of steam.

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A failed daily cycle leads to an intermediate cycle decline. Failed daily cycles typically peak on or before day 8. The dollar did break to a new high today. Thursday was day 5 for the dollar’s daily cycle. Although it printed a new high, the dollar also printed a bearish engulfing candle. A break below 88.23 forms a swing high and a break below the blue trend line will signal a daily cycle decline. A break below 87.56 produces a fail daily cycle.

Stocks have pretty much been advancing in tandem with the dollar and stocks also appear to be running out of steam.

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Thursday was day 35 for the daily equity cycle. Stocks also printed a bearish engulfing candle today. At day 35, stocks are in their timing band to seek out a daily cycle low. A break below 2062.34 forms a swing high. And a close below the 10 day MA will signal the daily cycle decline.

The Miners just may be waiting on the dollar and stocks to roll over.

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The Miners daily cycle peaked on day 14 and printed its lowest point since then on Wednesday day 19. At 19 days, the Miners are in their timing band to print a daily cycle low. A break above 19.97 forms a swing low and a close above the 50 day MA signals a new daily cycle. And if a new daily cycle is confirmed, the Miners would have broken the pattern of lower lows.