Cycle Trading

The Dollar

The dollar to close closed above the upper daily cycle band on Monday. Then delivered bullish follow through on Thursday and Friday. Closing above the upper daily cycle band ends the daily downtrend and begins a daily uptrend.

The dollar is now extended above the 10 day MA. The dollar will likely need to consolidate to allow the 10 da MA to catch up to price. However, should the dollar form a swing high, that opens the door to a possible left translated daily cycle formation. A break below 9164 forms a daily swing high.

Stocks

Stocks formed a swing low on Friday.

Stocks printed their lowest point on Thursday, day 23, which is early for a DCL. However, the previous DCL was stretched at 61 days, oftentimes cycles will follow a stretched cycle with a shortened cycle — which balances out the cycle counts.

Friday’s swing low closed above the 50 day MA to signal the new daily cycle. We will use a close above the 10 day MA to label day 23 as the DCL. Stocks should then break above the declining trend line as it rallies out of its DCL.

Stocks did close below the lower daily cycle band on Thursday. That ended the daily uptrend and began a daily downtrend. But a close back above the upper daily cycle band will renew the daily uptrend,

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