Cycle Trading

The Dollar

The bearish reversal on Tuesday followed by closing below the 50 day MA on Thursday confirms the daily cycle decline.

The dollar peaked on day 12 and printed its lowest point on Wednesday, day 15. Since 25 out of the last 30 daily cycles stretched 24 days or longer, a peak on day 12 can still result in a left translated daily cycle formation. The dollar still needs to turn the 10 day MA lower before we can expect a DCL to form. Currently the dollar is in a daily uptrend. A close below the lower daily cycle band will end the daily uptrend and begin a daily downtrend.

Stocks

Stocks printed their lowest point on Thursday, day 40. That places stocks in their timing band for a DCL.

Stocks printed an inside day on Friday, closing above the 200 day MA. Stocks will need to break above 2795.14 in order to form a swing low to signal a new daily cycle. However, the 764 million Selling on Strength that printed on Friday suggests that the bottom is not yet in. If Thursday was the DCL then stocks should not be printing large SOS days …

Stocks have begun to close below the lower daily cycle band which ends the daily uptrend and begins a daily downtrend.

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