Cycle Trading

The dollar was rejected by the 50 day MA on Monday,  closing below the 10 day MA. The dollar delivered bearish followed through Tuesday, Wednesday and Thursday.    The dollar broke below the day 37 low on Thursday, causing the status of the daily cycle to be uncertain.   Friday could be day 11 of a failed daily cycle. However, the dollar rallied on Friday, potentially making Friday day 48 of a stretched cycle.  A swing low and  the recovery of the breakdown level would signal Friday as the DCL.  Then we would need to see close above the 10 day MA in order to label day 48 as the DCL. What is clear is that the dollar is still in a daily downtrend.  Breaking below the 37 low indicates a continuation of its daily downtrend and signals a cycle band sell signal.

Stocks broke out to a new all-time high on Friday. Stocks are now quite stretched above the 10 day MA. Stocks may need to consolidate in order to allow the 10 day MA time to catch up to price. However, Friday was day 23, placing stocks in the early part of their timing band for a DCL. A break below 6132.35 will form a swing high. Then a close below the 10 day MA will signal the daily cycle decline.   Stocks are currently in a daily uptrend. They will remain in their daily unless they close below the lower daily cycle band.

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