Cycle Trading

The dollar printed its lowest point on day 17, which was early to expect a DCL.

However, Thursday’s big day caused the dollar to close above the declining trend line to have us label day 17 as the DCL. Consider that there have been 3 previous the daily cycles since printing the intermediate cycle low in January. They have run short at 14 days, 19 days and 14 days respectively. By breaking above the declining trend line the dollar continues that trend of shortened daily cycles.

With Thursday being labeled as the DCL, that forms a higher low to signal that this was the first daily cycle of a new intermediate cycle. I want to see a close above the day 9 high for confirmation that this is a new intermediate cycle. The dollar is in a daily uptrend. It will remain in its daily uptrend unless it closes below the lower daily cycle band.

Stocks

Stocks printed a bearish engulfing candle on Wednesday and a swing high on Thursday.

Thursday was day 29 for the daily equity cycle, which places stocks 1 day shy of its timing band for a daily cycle low. At this point a close below the the 10 day MA will signal the daily cycle decline. Stocks should then break below the (black) daily uptrend line before forming its DCL. The new high on day 28 locks in a right translated daily cycle formation which aligns with stocks being in a daily uptrend. Stocks will continue in their daily uptrend unless they close below the lower daily cycle band.

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