Cycle Trading

Bearish divergences are beginning to appear on the oscillators.

Tuesday was day 25 for the daily equity cycle. Stocks should be seeking out the DCL over the next 10 – 15 days. One thing that could send stocks lower is a rallying dollar.

The dollar printed its lowest point on day 21, placing it in the early part of its timing band for a daily cycle low. The dollar managed to find some support above the 200 day MA on Monday and formed a swing low on Tuesday. Tuesday’s swing low has the dollar in the process of breaking above the 50 day MA to signal a new daily cycle. A close above the 10 day MA will have us label day 21 as the DCL.