Cycle Trading

The Dollar

The dollar closed above the upper daily cycle band on Wednesday and then continued higher through Friday, resuming its daily uptrend.

The dollar has been in a strong daily uptrend. The dollar will remain in its daily uptrend unless it closes below the lower daily cycle band.

Stocks

Stocks are still seeking their daily cycle low.

Stocks printed a bullish reversal off of support from the daily cycle trend line and the 50 day MA on Wednesday. But stocks failed to deliver any bullish follow through. Instead, stocks were contained by the declining 10 day MA and continued lower on Thursday and Friday.

Stocks printed their lowest point on Friday, day 38, placing them in their timing band for a daily cycle low. Stocks did breach the daily cycle trend line and caused the 10 day MA to turn lower. While I would like to see stocks break convincingly below the daily cycle trend line, they have done enough to satisfy the conditions for a DCL. And there is a bullish divergence developing on RSI. So at this point, a swing low and a close back above the 10 day MA will signal the DCL. A break above 2987.31 will form a DCL.

Stocks are currently in a daily uptrend. If a swing low forms above the lower daily cycle band then stocks would remain in their daily uptrend and trigger a daily cycle band buy signal. However at 16 weeks a new daily cycle should usher in the intermediate cycle decline, therefore we are suspicious that the new daily cycle will left translate.

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