Cycle Trading

The Dollar

The dollar printed a bearish reversal on Wednesday then formed a swing high on Thursday.    

The dollar did not deliver bearish follow through. Instead, the dollar delivered a bullish surprise by forming a swing low on Friday, negating Thursday’s swing high. This also allows us to construct an accelerated (dashed) trend line.   Currently, the dollar is in a daily uptrend.  The dollar will remain in its daily uptrend unless it closes below the lower daily cycle band. 

Stocks

We will start off with a look at the Nasdaq.

While the Nasdaq closed below the 10 day MA on day 27, it really did not satisfy the parameters for a DCL. Now the Nasdaq is breakout out to new all-time highs.

Usually breakouts that occur late in the daily cycle are often reversed. But with the flood of global liquidity and stocks entering the most bullish time of the year, this maybe all the correction we will see, so stops should be adjusted to the new breakout level.

The S&P remain is consolidation. A break below the day 27 low of 4630.66 would allow stocks to complete their daily cycle decline. turn the 10 day MA lower in order to complete its daily cycle decline. But close above the 4718.50 level may see the S&P follow the Nasdaq higher.