Cycle Trading

The dollar emerged out of a 4 week consolidation late February. This new cycle printed its highest point on Monday day 13. A new high on day 13 continues to shift the odds towards this daily cycle forming as a right translated cycle.

Tuesday was day 14 for the dollar’s daily cycle and the dollar formed a swing high today. While a swing high does guarantee a cycle decline, a cycle decline cannot begin with out a swing high. The dollar is still four days shy from entering its timing band for seeking a daily cycle. So the dollar can certainly go higher. But if the dollar is ready to break lower, tomorrow’s FOMC meeting could provide the catalyst.

Meanwhile bonds continue to emerge out of their recent daily cycle low.

Tuesday was day 7 for the daily bond cycle. This daily cycle continues to develop bullishly with bonds printing a higher high today. However, we will need to keep a watch on the 50 day MA. A clear and convincing close above the 50 day MA will signal that this daily cycle is forming as a right translated cycle. Which would indicate that bonds not only began a new daily cycle, but a new intermediate cycle as well. However, rejection by the 50 day MA would signal that bonds are still caught in the grip of an intermediate cycle decline.