Cycle Trading

The Dollar 

The dollar printed a bearish reversal on day 7 and then formed another bearish reversal on Friday.

The has been a definite bearish change in behavior for the dollar since printing the day 33 high in September. Half the daily candles since then have been bearish and the dollar is threatening to form a lower high. A high on day 13 can still result in a left translated daily cycle formation. The dollar has already closed below the 10 day MA. A break below 111.57 will form a swing high to signal the daily cycle decline. The dollar is currently in a daily uptrend. But a close below the lower daily cycle band will end the daily uptrend and begin a daily downtrend.

Stocks

Stocks printed a convincing bullish reversal on day 26, placing stocks in the early part of its timing band for a DCL. 

Stocks closed above the declining trend line on Tuesday to signal a new daily cycle. Then stocks drifted lower into Friday.

Stocks got a bit stretched above the 10 day MA on Tuesday and formed a swing high on Wednesday.  The decline into the day 26 low caused the 10 day MA to decline sharply.  Stocks consolidated until Friday, which allowed the 10 day MA to cathc up to price. Then stocks (finally) delivered bullish follow through on Friday — turning the 10 day MA higher to affirm day 26 as the DCL.

Stocks have been declining for 10 months. Stocks are now overdue for a yearly cycle low. In the Weekend Report I discuss the status of the yearly cycle and also look at potential bullish surprise on the 4 year cycle.