Cycle Trading

The Dollar

The peak on day 4 indicates a left translated daily cycle formation.

The dollar closed below both the 10 DMA & the 50 DMA on Thursday to indicate the daily cycle decline. The dollar still needs to turn the 10 day MA lower. A break below the previous DCL of 94.34 forms a failed daily cycle to confirm the intermediate cycle decline. A failed daily cycle would align with our weekly cycle framework. The dollar is in a daily downtrend & will remain so unless it closes above it the upper daily cycle band.

Stocks

Stocks had 3 days this week with significant Selling on Strength numbers that totaled 989 million. A clustering of SOS days often precede a cycle decline.

Friday was day 21 for the daily equity cycle, placing stocks 2 weeks shy of the timing band for a DCL. The peak on day 10 indicates a left translated daily cycle formation. This aligns with our longer, intermediate cycle framework calling for stocks to decline into an intermediate cycle low. A break below the solid blue trend line should send stocks into their final decline into their intermediate cycle low.

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