Cycle Trading

The Dollar

The dollar formed a swing high on Friday.

Friday was day 27 for the dollar’s daily cycle. That places the dollar in its timing band for a daily cycle low. So Friday’s swing high signals the daily cycle decline. A close below the 10 day MA would indicate a move into the daily cycle low. The dollar should break below the (blue) daily cycle trend line in order to complete its daily cycle decline. The dollar is currently in a daily uptrend. It will remain in its daily uptrend unless it closes below the lower daily cycle band.

Stocks

Stocks closed below the 10 day MA on Wednesday and continued lower through Friday to indicate the daily cycle decline.

Stocks broke below the day 32 low on Wednesday. However I do not believe that day 32 was the daily cycle low. While stocks did break below the daily cycle trend line and day 32 is in the early part of its timing band for a DCL, stocks did not turn the day 10 MA noticeably lower.

Friday was day 43, placing stocks in their timing band for a daily cycle low. Friday’s bullish reversal off of support from the 50 day MA eases the parameters for forming a daily swing low. A break above 2945.50 will form a swing low to indicate the new daily cycle. Stocks are still in a daily uptrend. If a swing low forms above the lower daily cycle band then stocks will remain in their daily uptrend and trigger a cycle band buy signal.

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