Cycle Trading

The intermediate dollar cycle peaked back in December on week 14. It has been in decline ever since.

This is week 31 for the intermediate dollar cycle. This places the dollar deep in its timing band to print an intermediate cycle low. A weekly swing low is required to mark the intermediate cycle low. A break above 96.42 forms a weekly swing low.

The dollar printed a lower low today. While today may have been day 9,
there are 2 reasons why I suspect an extended daily cycle with today being day 34.

1) The bullish TSI divergence indicates a possible bullish surprise for the dollar.

2) The lower low has extended the intermediate cycle out to week 31. A day 9 count would mean that the dollar would need another 2 – 4 more weeks before a daily cycle low forms, thus extending out the intermediate cycle to weeks 33 – 35, a low probability scenario.

Which makes a day 34 count more likely. A break above 95.01 will form a daily cycle low and quite likely indicate that the intermediate cycle low has formed as well.

Meanwhile stocks did form a swing high today.

Thursday was day 33 for the daily equity cycle. Which places stocks in their timing band to print a daily cycle low. A loss of the 10 day MA at this point should indicate that stocks have begun their decline into a daily cycle low. A peak on day 32 assures us of a right translated cycle formation. Stocks have been in a daily uptrend. They will remain in a daily uptrend if the daily cycle low forms above the lower daily cycle band.