Cycle Trading

The dollar formed a swing high on Monday.

Monday was day 11 for the dollar’s daily cycle. The dollar is still 7 days shy of entering its timing band to seek a daily cycle low. However …

The True Strength Indicator has already exceed the level that has marked previous cycle highs. And the TSI is beginning to rollover. Now some bearish follow through should end the dollar into a daily cycle decline.

The intermediate cycle is either on week 29 or week 14. If week 29 is the correct count then once the dollar rolls over it should enter an intermediate cycle decline.

But if the dollar is on week 14, that would place the dollar 4 weeks shy of its timing band for an intermediate cycle low. Currently the daily cycle high printed on day 10. A peak on day 10 does shift the likelihood towards a right translated daily cycle formation. Allowing for 10 – 15 days for the dollar to print a daily cycle low would take the weekly cycle out to weeks 16 or 17. Then one more failed daily cycle would take the weekly cycle count out to weeks 21 – 24, which is right in the timing band for an intermediate cycle low.

Under a week 14 scenario the dollar potentially can trend lower 7 out of the next 9 weeks.