Cycle Trading

The Dollar

The dollar broke below the day 15 low on Tuesday to extend the daily cycle decline.

Tuesday was day 17, placing the dollar in the early part of its timing band for a DCL

The dollar formed a swing low on Wednesday. The dollar closed above the 10 day MA on Thursday then delivered bullish follow through on Friday to signal the new daily cycle. The 10 day MA is still declining. The 10 day MA will need to flatten out before it can turn higher. The dollar is currently in a daily downtrend. The dollar will remain in its daily downtrend unless it closes back above the upper daily cycle band.

Stocks

Stocks formed a daily swing high on Thursday.

The 10 day MA did not turn lower as stocks declined into the day 35 low, therefore we are uncertain if the day 35 was a daily cycle low. Therefore the status of the daily cycle is not clear. Friday could be day 53 of a stretched daily cycle or day 17 of the 3rd daily cycle for the current intermediate cycle. However, it appears that stocks are acting as if day 35 was the DCL. Either way stocks are due for a correction. If stocks deliver bearish follow through and close below the 10 day MA that will signal the daily cycle decline. Stocks are in a daily uptrend. They will remain in their daily uptrend unless they close below the lower daily cycle band. 

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