Cycle Trading: Weekend Report Preview
|The Dollar
The dollar formed a daily swing low on Wednesday.
The dollar printed its lowest point on Monday, day 20, to place it in the early part of its timing band for a daily cycle low. The dollar closed above the converging 10 day MA and the 50 day MA on Friday so we will label day 20 as an early DCL. The dollar also closed above the upper daily cycle band on Friday to indicate that the dollar will remain in its daily uptrend. Closing above the upper daily cycle band also signals that the intermediate cycle low has been set.
The dollar printed its lowest point on week 17, which was early for an ICL. But the rally off of support from the 50 week MA indicates that week 17 was the ICL. This week the dollar printed a bullish weekly reversal and close back above the 10 week MA, which has caused it to turn higher. So we will label week 17 as the ICL. 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 formed a daily swing high on Wednesday.
Wednesday was day 34 for the daily equity cycle, placing stocks in their timing band for a daily cycle low. So Wednesday’s swing high should send stocks into their daily cycle decline. A close below the 10 day MA will indicate the daily cycle decline.
Stocks did close below the 10 day MA on Thursday but then printed a bullish reversal on Friday to close back above the 10 day MA. This makes our daily cycle count unclear. Stocks did not do enough to say that day 34 was the DCL. What is clear is that stocks are in a daily uptrend. If stocks form a swing low here they will remain in their daily uptrend and trigger a cycle band buy signal. A break above 3118.97 forms a daily swing low.
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