Cycle Trading

The Dollar

The dollar closed above the 10 day MA on the previous Friday and delivered bullish follow through this week to confirm the new daily cycle.

The dollar remains caught between the rising 10 day MA and the declining 50 day MA. Currently, the dollar is in a daily downtrend. A close above the upper daily cycle band and the 50 day MA would end the daily downtrend and signal that the dollar has also begun a new intermediate cycle. Rejection by the declining 50 day MA will indicate a continuation of the intermediate cycle decline.

Stocks

Stocks have not delivered anything that we could recognize as a DCL — but that may change.

Stocks have been stair stepping higher and then consolidating in order to allow the 10 day MA to catch up to price. Which happened again this week. But stocks formed a swing high and closed below the 10 day MA on Friday, piercing the daily cycle trend line. Any bearish follow through will confirm the daily cycle decline. Stocks are 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.

If a swing low forms ABOVE the upper daily cycle band that indicates that breakout continues to advance.