The 10/02/15 Weekend Report Preview

The Dollar
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The dollar lost the 50 day MA on August 19th as it declined into a failed daily cycle low. The dollar has been contained by the 50 day MA ever since.

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The current daily cycle formed a swing low and regained the 10 day MA on day 1. The dollar continued to be supported by the 10 day MA while experiencing continued resistance at the 50 day MA. The 10 day MA and the 50 day MA converged on Friday resulting with the dollar being squeezed lower and losing both the 50 day and the 10 day MA signaling that the dollar has begun its daily cycle decline.

Stocks
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Stocks closed on Thursday tagging the 10 day MA and printing a huge 734 million Selling on Strength. Since stocks had not yet entered their timing band for a daily cycle low our cyclical expectation was to see stocks continued lower.

And stocks did open lower on Friday.

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Stocks opened on Friday by dropping over 26 handles. It appeared that the gravitational pull of an impending daily cycle low was going to take over and cause stocks to form a failed daily cycle. Then stocks recovered.

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The daily equity cycle peaked on day 17. A swing high formed sending stocks into their daily cycle decline. Stocks printed their lowest point on Tuesday following the day 17 peak. A swing low formed on Wednesday. Stocks continued to recover on Thursday but were halted by the 10 day MA. Friday’s bullish reversal regained the 10 day MA. Stocks also closed above the lower daily cycle band indicating that an early 25 day daily cycle low has been left behind. Friday’s bullish reversal looks like it prevented a failed daily cycle. Now a break of the declining trend line will confirm a new daily cycle.

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2 responses to “The 10/02/15 Weekend Report Preview”

Alexandru Popovici

October 4, 2015

Why should the new DC be confirmed by the blue trendline: isn’t it the IC trendline?
Wasn’t the DC trendline built by the highs of days 17Sep and 25 Sep and wasn’t it broken on Friday? Thank you

1. likesmoneystudies
  
  October 4, 2015
  
  Alexandru,
  
  You are correct that a break of the blue trend line also signals a new weekly cycle. And you are correct again that I would usually draw the declining trend line off the highs of days 17Sep and 25 Sep. I felt that since a low formed on day 25 is early for a daily cycle low that I wanted to to see more confirmation.
  
  LM

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