Cycle Trading: The Weekend Report Preview
|The Dollar
The dollar printed a huge bearish reversal on day 13. That was negated this week.
Despite forming a daily swing high on Monday, the dollar managed to regain the 10 day MA. Then the dollar continued higher into Friday. The new high on Friday, day 18, assures us of a right translated daily cycle formation. The dollar continues to be in daily uptrend. The dollar will remain in its daily uptrend unless it closes below the lower daily cycle band.
The dollar printed a bearish weekly reversal on week 5. The dollar negated the week 5 bearish reversal this week by closing above the week 5 high. This was week 9 for the intermediate dollar cycle. The dollar currently is in a weekly uptrend. The dollar will continue in its weekly uptrend unless it closes below the lower weekly cycle band.
Stocks
The status of the daily cycle clarified on Friday.
The status of the daily cycle had not been since printing the day 44. Stocks began to rally on Tuesday and continued higher into Friday’s close. Stocks closed above the declining trend line on Thursday. Stocks then delivered bullish follow through on Friday and also managed to turn the 10 day MA higher. Therefore we will label day 44 as a DCL. Currently the daily cycle peak occurred on day 6. Stocks will need to break above the day 6 high of 22943.31 in order to right translate the daily cycle. Currently stocks are in a daily downtrend. They will remain in their daily downtrend unless they can close back above the upper daily cycle band.
Stocks closed below the 10 week MA on week 8. And this is now the 4th consecutive week that stocks are completely below the 10 week MA. This is causing the 10 week MA to begin to turn lower, one of our confirmations of the intermediate cycle decline. Stocks are caught between the 10 week MA and the 50 week MA. Unless there is some type of major intervention from the Fed, stocks will likely continue their intermediate cycle decline. Stocks will need to either close above the 10 week MA or below the 50 week MA in order for a trending move to develop. Currently, stocks are in a weekly uptrend. A close below the lower weekly cycle band would end the weekly uptrend and begin a weekly downtrend.
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