Cycle Trading

The Dollar 

The status of the daily cycle is not clear.

The dollar printed its lowest point on day 17, which is early for a DCL. The rally out of the day 17 low closed convincingly above both the 50 day MA and the 10 day MA and the upper daily cycle band — indicating that day 17 was an early DCL. Then the dollar dropped 1.9% on Friday, forming a swing high and closing below the converging 10 day MA and 50 day MA. The 10 day MA never turned higher to confirm the new daily cycle, causing uncertainty for the daily cycle count. The quick bearish reversal on RSI 05 is characteristic of the declining phase of the intermediate cycle decline, which makes me think that Friday was day 6.

Stocks

The initial surge out of the day 26 DCL saw stocks get stretched above the 10 day MA. Stocks had been consolidating above the 50 day MA — until Wednesday.

The Fed raising rates by .75% caused stocks to drop 2.5% on Wednesday and then another 1.06% on Thursday.   Despite dropping 3.56 % on Wednesday and Thursday, stocks are still in a daily uptrend. And stocks form a swing low above the lower daily cycle band on Friday, which indicates that they remain in their daily uptrend. A close above both the 10 day MA and the 50 day MA will affirm that they will remain in a daily uptrend and signal a cycle band buy signal.

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