Cycle Trading

The dollar rallied on Wednesday, forming a swing low.

The dollar printed its lowest point Tuesday, day 28, placing it in its timing band for a DCL. Wednesday’s swing low closed back above both the 10 day MA and the 200 day MA. The dollar should have turned the10 day MA lower in order to complete its DCL, which did not happen. But with the dollar being in a daily uptrend, Wednesday’s price action signaled a new daily cycle.

However, the dollar was unable to deliver any bullish follow through on Thursday, which casts some doubt it day 28 was the DCL.

If the dollar delivers bearish follow through and closes below the 10 day MA that will signal that Thursday was day 30 and the dollar still needs to complete its daily cycle decline.

Precious metals were bullish on Thursday in response to the dollar, with the Miners forming a swing low. It is possible that the Miners formed a DCL on Wednesday. A close above the 10 day MA would have us label day 20 as the DCL. However, I do not think that the Miners have completed their intermediate cycle decline. Which I plan to discuss this in the Weekend Report.