Cycle Trading

The Dollar

The dollar closed below the 10 day MA on Wednesday.

The dollar recovered the 10 day MA on Thursday and formed a swing low on Friday. Therefore we will construct our daily cycle trend line. The dollar is currently in a daily uptrend. Since it formed a swing low above the lower daily cycle band on Friday that signals that the dollar remains in its daily uptrend and triggers a cycle band buy signal.

Stocks

Stocks formed a swing high on Thursday then closed below the 10 day MA on Friday.

Stocks are now caught between the 10 day MA and the 50 day MA. If stocks continue lower and close below the 50 day MA, that will left translate the daily cycle to signal the daily cycle decline.

Stocks closed below the ‘line in the sand’ — indicating a false breakout. A close below the 50 day MA would indicate that stocks are still seeking out their ICL.

However stocks are currently in a daily uptrend. If stocks can form a swing low and close back above the 10 day MA then they will remain in their daily uptrend and trigger a cycle band buy signal. And if they close back above the ‘line in the sand’ then stocks would resume their intermediate cycle advance. One thing to watch is to see if RSI 03 reverses now that it is near oversold.  

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