Cycle Trading: The Weekend Report Preview
|The Dollar
Boom - the dollar closed below the 200 day MA on Friday.
The dollar printed its lowest point on Friday, day 25 to place it in the its timing band for a daily cycle low. The dollar did break below the previous daily cycle low to form a failed daily cycle which confirms the intermediate cycle decline. The dollar is in a daily downtrend and will remain so unless it closes back above the upper daily cycle band.
We will see on the weekly chart that this is week 16 for the intermediate cycle, which is early to expect an ICL. Therefore it it possible to see a swing low and recovery of the 200 day MA next week to signal a new daily cycle.
This was week 16 for the intermediate cycle. The dollar closed below the 10 week MA last week and delivered bearish follow through this week, confirming the intermediate cycle decline. The dollar did find support at the 50 week MA. This support could allow the dollar to begin a new daily cycle. With this only being week 16, there is plenty of time to allow for a left translated daily cycle to form. The dollar is very late in its timing band for a yearly cycle decline. A failed intermediate cycle would confirm the yearly cycle decline. A break below 95.36 forms a failed weekly 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
Stocks closed above the declining trend line on day 6 and then delivered bullish follow through on Tuesday by closing above the upper daily cycle band.
Stocks got a bit stretched above the 10 day MA and will probably need several days to cool off in order to allow the 10 day MA to catch up to price. Closing above the upper daly cycle band ends the daily downtrend and begins a daily uptrend.
Stocks formed a weekly swing low the previous week then closed higher this past week. Closing higher this week keeps the triangle weekly consolidation pattern valid which sets the stage that week 17 was the intermediate cycle low. A close above the upper stem of the triangle consolidation would confirm the new intermediate cycle. Currently, stocks are in a weekly uptrend. They will remain in its weekly uptrend unless it closes below the lower weekly cycle band.
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