Cycle Trading

The Dollar

The dollar closed below both the 10 day MA and the lower daily cycle band on Wednesday to confirm the daily cycle decline and signal a continuation of the intermediate cycle decline. The dollar went on to break below the previous daily cycle low on Friday, forming another failed daily cycle.

The dollar printed its lowest point on Friday, day 16, which is a little early for a DCL. However the dollar printed a bullish reversal on Friday, which eases the parameters for forming a swing low. A break above 89.15 forms a swing low to signal the new daily cycle. The dollar is in a daily downtrend & will remain so unless it closes above it the upper daily cycle band.

Stocks

Stocks closed above the declining 10 day MA on Wednesday and then the broke above the declining trend line to close above the 50 day MA on Thursday to confirm the new daily cycled.

Stocks have rallied nearly 8% off the day 58 low. Such a strong rally over the past 5 days is indicative of an ICL. Stocks may also need to consolidate a bit before continuing to advance. Stocks are currently in a daily downtrend. A close back above the upper daily cycle band will end the daily downtrend and begin a new uptrend.

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