Cycle Trading: Weekend Report Preview
|The Dollar
The dollar formed a bearish reversal on Thursday.
The dollar delivered bearish follow through by forming a swing high and closing below the 10 day MA on Friday to signal the daily cycle decline. The peak on day 8 indicates a left translated daily cycle formation which sets the dollar up for an intermediate cycle decline. Currently the dollar is in a daily uptrend and will remain so until it closes below the lower daily cycle band.
Stocks
The Transports, the Banks, the Nasdaq and the Russell all printed lower lows on Thursday.
However the S&P has not printed a lower low.
As we will see on the weekly chart, stocks are in its timing band for an intermediate cycle low. Stocks have formed a weekly swing high and closed below the 10 week MA which signals that the intermediate cycle decline has begun.
What is clear is that day 45 is the lowest point following the day 37 peak. A break above the declining trend line would confirm day 45 as the daily cycle low. But a break below the day 45 low of 2820.12 would extend the daily cycle decline. Stocks have begun a daily downtrend and will continue in its daily downtrend until it can close back above the upper daily cycle band.
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