Cycle Trading

The Dollar

The status of the intermediate dollar cycle indicates that the dollar has begun its intermediate cycle decline. Therefore our cyclical expectation is to see left translated daily cycle formations until the intermediate cycle low prints.

The dollar closed below the lower daily cycle band on Wednesday confirming a continuation of the intermediate cycle decline. Wednesday was day 17, which is one day shy of the timing band for a DCL. The dollar may be forming a mini bear flag to possibly back test the declining 10 day MA. At 19 days, there is still plenty of time for the dollar to make one more break lower into its final daily cycle decline. A break below 92.43 forms another failed daily cycle.

Stocks

Stocks gapped higher on Monday and then drifted lower into Friday.

Drifting lower into Friday allowed stocks to back fill Monday’s gap. It also allowed for the 10 day MA to catch up to price. Stocks will enter their timing band for a daily cycle low next week. The bearish TSI divergence suggests that a close below the 10 day MA would signal the beginning of the daily cycle decline. Still, stocks are in a daily uptrend. They will remain in their uptrend unless they close below the lower daily cycle band.

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