Cycle Trading

The Dollar 

The dollar broke below the day 25 low on Wednesday to extend its daily cycle decline.

The dollar printed its lowest point on day 32, placing it deep in its timing band for a DCL. The dollar formed a swing low and closed above the 50 day MA on Friday to signal the new daily cycle. A close above the 10 day MA will have us label day 32 as the DCL. The dollar should go on to break above the declining trend line as it rallies out of its DCL. The dollar closed below the lower daily cycle band on Wednesday. Closing below the lower daily cycle band ends the daily uptrend and begins a daily downtrend. Closing below the lower daily cycle band signals that the intermediate cycle decline has begun.  

Stocks

Stocks broke above the 4150 resistance level on Monday then delivered bullish follow through on Friday.

Friday was day 38, placing stocks deep their timing band for a daily cycle low.  Breakouts that come late in the daily cycle are almost always given back once the daily cycle decline begins. A swing high and close below the accelerated (dashed) trend line will signal the daily cycle decline. Stocks will need to turn the 10 day MA lower before the DCL can form. Stocks should then go on to break below the (blue) daily cycle trend line as they seek out their DCL. Stocks are currently in a daily uptrend.  They will remain in their daly uptrend unless they close back below the lower daily cycle band. 

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