Cycle Trading

The Dollar

The dollar undercut the day 27 low to print its lowest point on day 34, placing the dollar late in its timing band for a DCL.

The dollar closed above the 50 day MA on Thursday and then delivered bullish follow through by closing above the upper daily cycle band on Friday. Closing above the upper daily cycle band ends the daily downtrend and begins a daily uptrend. It also confirms the new daily cycle.

We continue to watch the 5 day RSI. It began to develop a bearish pattern that is characteristic of a declining phase of the intermediate cycle. RSI reached overbought on Friday. If it embeds here, that would indicate that the dollar is in the advancing phase of the intermediate cycle. But a quick reversal would signal that the dollar is declining into an intermediate cycle low.

Stocks

Stocks lost the 50 day MA on Monday and continued lower into Friday.

Stocks printed their lowest point on Friday, day 26, which is early for a DCL. With the uncertainty of next week’s election along with other asset classes like the Miners and oil forming failed daily cycles makes me want to see a failed daily cycle here before expecting a DCL to form. Break below the previous DCL of 3208.45 forms a failed daily cycle. Stocks have begun a daily downtrend. They will remain in their daily downtrend until they can close back above the upper daily cycle band.

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