Cycle Trading

The Dollar 

The dollar became stretched above the 10 day MA on Tuesday.

The dollar consolidated this week which allowed the 10 day MA to catch up to price. The dollar then formed a bullish reversal on Friday off support from the rising 10 day MA. The dollar is currently in a daily uptrend.  If the dollar forms a swing low above the upper daily cycle band that will indicate a continuation of the daily uptrend and signal a cycle band buy signal. A break above 108.82 will form a daily swing low.

Stocks

Stocks were rejected by the 10 day MA on Friday.

Stocks formed a swing high on Friday to break below Wednesday’s low. This negates the swing low formed on Thursday to extend the daily cycle decline. Friday was day 48, that places stocks deep in their timing band for a DCL. Stocks have now retraced to the 38% fib level.  Stocks should break below the blue daily cycle trend line in order to complete their daily cycle decline. However, we need to be alert to the possibility of the 50 day MA providing support for the DCL to form. Stocks closed below the lower daily cycle band on Friday. Closing below the lower daily cycle band ends the daily uptrend and beings a daily downtrend.

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