Cycle Trading

The Dollar

The dollar broke above the day 5 high on Tues, day 13, shifting the odds towards a right translated daily cycle formation.

Friday was day 16, placing the dollar 2 days shy of its timing band for a daily cycle decline. The dollar closed below the 10 day MA on Friday to signal that the daily cycle is in decline. The dollar will need to break below the daily cycle trend line to confirm the daily cycle decline. The dollar is firmly in a daily uptrend. It will remain in its uptrend unless it closes below the lower daily cycle band.

Stocks

Stocks printed their lowest point on Monday, day 28. A bullish reversal on day 28 has good odds of being the DCL. But with the banks, the Russel and the Transports all breaking lower on Friday, stocks are likely to follow.

Friday was day 32 for the daily equity cycle. That places stocks in their timing band for a daily cycle low. An undercut of the day 28 low should maximize bearish sentiment, getting everybody on the wrong side of the boat. A likely trigger for the DCL would be the FOMC meeting on Wednesday. Stocks are still in a daily downtrend. They will remain in its downtrend unless they close above the upper daily cycle band.

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