Cycle Trading

The Dollar

The dollar formed a swing high on Wednesday and broke the daily cycle trend line on Thursday to signal the daily cycle decline.

Friday was day 32 for the dollar’s daily cycle. The dollar should close below the 10 day MA and turn it lower before a daily cycle low can form. The peak on day 29 assures us of a right translated daily cycle formation. The dollar is in a daily uptrend. It will remain in its uptrend unless it closes below the lower daily cycle band.

Stocks

With the Russell breaking out to new highs on Wednesday and the Nasdaq on Friday I suspect that the S&P will follow suit..

Stocks formed a swing low & closed back above the 10 DMA to signal that day 17 hosted a half cycle low. Stocks also closed above the upper daily cycle band to remain in its daily uptrend. Stocks need to break above the day 13 high of 2742.24 in order to form a right translated daily cycle.

However the large Selling on Strength print signals that the daily cycle may be topping …

There was a 635 million Selling on Strength number that printed on Friday. While stocks can still rally higher, this signals caution going forward.

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