Cycle Trading

Dollar

The rally out of the DCL caused the dollar become stretched above the 10 day MA. 

The dollar backtested the previous daily cycle high on Friday, which allowed the 10 day MA to catch up to price. The 99.50 level should now act as support. There are bearish divergences beginning to develop on the oscillators. A break below the 99.50 support level would signal the daily cycle decline. However, the dollar is currently in a daily uptrend.  If the dollar forms a swing low above the upper daily cycle band then the dollar will remain in its daily uptrend and trigger a cycle band buy signal.  

Stocks

Stocks printed their lowest point on Tuesday, then began crawling along the 50 day MA.

Tuesday was day 33 for the daily cycle, placing stocks in their timing band for a DCL. Stocks need to form a swing low and close back above the 10 day MA to signal that day 33 was the DCL. A break above 4471.00 will form a daily swing low. So while stocks recovered the 50 day MA on Wednesday, they lost the 50 day MA on Thursday. A break below the day 33 low of 4381.34 will extend the daily cycle decline.

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