Cycle Trading

The is a little uncertainty regarding the dollar’s daily cycle.

The dollar printed its lowest point on Tuesday, day 8, which is too early to expect a daily cycle low. A close above the 10 day MA might have us consider that day 23 was not the daily cycle low, which would make Friday day 33. A close back above the 200 day MA would then convince me that Tuesday was the DCL. But this looks more like a dead cat bounce. I think that a more likely scenario is that the dollar is continuing into its failed, daily cycle decline after a possible kiss good bye of of the 200 day MA. The dollar is in a daily downtrend. It will remain in its daily downtrend unless it can close above its upper daily cycle band.

Stocks

Stocks got a bit stretched above the 10 day MA and it appears that there was some profit taking as stocks broke out to a new all time high. This has allowed the 10 day MA to catch back up to price.

Stocks declined through Wednesday, which was day 17, and closed below the 10 day MA. Stocks regained the 10 day MA and formed a swing low on Friday to signal that day 17 was a half cycle low. Stocks are in a daily uptrend. The swing low formed above the upper daily cycle band so stocks will remain in their daily uptrend and triggered a cycle band buy signal.

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