Higher Highs

July 16, 2015

The dollar’s new high today has locked in a right translated nature to the current daily cycle.

Today was day 19 for the dollar’s daily cycle. A new high on day 19, or later, locks in a right translated nature to this daily cycle. However at 19 days, the dollar has entered its timing band to seek out a daily cycle low. Which means that during the impending daily cycle decline our expectation is to see the dollar print a higher daily cycle low.

Stocks also printed a new daily cycle high on Thursday.

Stocks closed above the upper daily cycle band today which confirms that stocks are in a new intermediate cycle. Thursday was day 7 for the daily equity cycle. Since this is the first daily cycle of a new intermediate cycle our expectation is to see this daily cycle form as a right translated daily cycle. Therefore we should see the daily cycle peak around day 20, or later.

2 responses to “Higher Highs”

Geurt Hoekman

July 16, 2015

Hi there,
You said: “our expectation is to see the dollar print a higher daily cycle low”. Means from here s we expect to rally the USD? As well you said about the SPX: “Therefore we should see the daily cycle peak around day 20, or later”. This means the rally on the SPX is going higher?
Thanks so much for your explanation.

Reply
1. likesmoneystudies
  
  July 17, 2015
  
  Geurt,
  
  A right translated cycle forms a higher low and delivers the expectation of a higher high. However,on a larger time frame the dollar is forming a triangle pattern that may prevent a higher high.
  
  Regarding stocks: When the pattern of lower highs and lower lows breaks that signals a new intermediate cycle. Therefore a new intermediate cycle is usually characterized by the right translated formation of the first daily cycle. A peak on day 20 or later typically locks in a right translated nature to the daily equity cycle. Having said that, I think that stocks will experience more volatility.
  
  Please note that prior to December stocks consistently rallied above the 50 day MA. Since December, that has not been the case.
  
  LM
  
  Reply