Cycle Trading

The Dollar
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The new high on day 11 swings the likelihood over to this daily cycle forming as a right translated cycle.

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While is it possible for a peak on day 11 to result in a failed daily cycle, it is not likely. Which means that this daily cycle should form as a right translated cycle.

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A right translated cycle means that our expectation would be to see the next daily cycle form a higher daily cycle high. Therefore the earliest that we could expect to see a failed daily cycle leading to an intermediate cycle decline would be the next daily cycle.

This is already the 6th daily cycle leading from the three year cycle low. Typically we see 2 to 3 daily cycles in an intermediate cycle.

The third daily cycle low (blue arrow) did not form as a failed daily cycle, but came close. Otherwise, it does look like an intermediate cycle low. And the dollar is behaving as if it was an intermediate low. Assuming that is was a stealth intermediate low, then this would be the third daily cycle of the new intermediate cycle, normalizing our cycle counts.

Stocks
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After peaking on Monday, 12/29, stocks formed a swing high and began to decline into Friday.

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Friday was day 11 for the daily equity cycle. We have been chronicled the 4.31 billion in Selling on Strength that has accumulated so far during this daily cycle. If the 50 day MA does not provide support, then stocks could potentially decline for another 20 – 30 days. However there has been 1.043 billion in Buying on Weakness over just the past three sessions. This has me thinking that the 50 day MA will provide support for a half-cycle low.

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