Cycle Trading

Both the dollar and stocks printed huge bearish candles today to signal not only a daily cycle decline, but an intermediate cycle decline as well.

So let’s begin by looking at the dollar.

I believe that the dollar printed a stealth daily cycle low on November 19th, making today day 9 of a new daily cycle. Today’s bearish reversal broke below the day 25 low, forming a failed daily cycle. The dollar also closed below the lower daily cycle band today. Both of these signals indicate that the dollar has begun its intermediate cycle decline. Allowing 3 to 4 weeks for the dollar to print a daily cycle low will take the weekly cycle out to around week 17 – 18. So it is possible for that this daily cycle decline will result in the dollar declining into an intermediate cycle low.

Stocks also broke lower today.

Stocks formed a swing high today and closed below both the upper daily cycle band and the 200 day MA which signals that stocks have begun its daily cycle decline. Stocks also delivered a clear and convincing close below the intermediate cycle trend line which signals that stocks have begun their intermediate cycle decline. Allowing 4 to 6 weeks for the daily cycle to print a daily cycle low will take stocks into its timing band for an intermediate cycle low. So it is quite likely that this daily cycle decline will result in stocks also declining into their intermediate cycle low.