Cycle Trading: The Weekend Report Preview

The Dollar

The dollar finally broke above the declining trend line on Wednesday to confirm that day 26 hosted the DCL.

The dollar's highest point so far was Wednesday, day 8.  If the dollar fails to break above Wednesday's high of  92.50 then it will form another left translated daily cycle.  The dollar is in a daily downtrend.  It will remain in its daily downtrend until it can close above the upper daily cycle band.

The dollar is very late in its timing band to form an ICL with week 31 remaining as the lowest point.   A weekly swing low and a break above the declining 10 week MA will confirm the new intermediate cycle. A break above 92.69 will form a weekly swing low.  The dollar is in a weekly downtrend and will continue in its weekly downtrend until it closes above the upper weekly cycle band.

The dollar printed a failed yearly cycle low in May, 2016 to confirm the 3 year cycle decline. Then the dollar went on to printed a higher monthly high. Since a cycle cannot fail and then print a higher high, this confirms that May, 2016 was an early 3 year cycle low. That makes September, 2017 month 16 for the new 3 year cycle.

16 months places the dollar deep in its timing band to form a yearly cycle low.  Since the dollar printed a lower monthly low in September the earliest a monthly swing low can form will be in October. The dollar has begun to close below the lower monthly cycle band indicating a monthly downtrend.  The dollar will remain in its monthly downtrend until it can close back above the upper monthly cycle band.

Now the dollar has broke below the previous 3 year cycle low.  This forms a failed 3 year cycle.  The remaining yearly cycles should now form as left translated yearly cycles until the next 3 year cycle low forms. And with confirmation of a failed 3 year cycle, this sets up as a left translated 3 year cycle. That aligns with our 15 year super cycle analysis.

The dollar cycles through a 15 year super cycle. Each 15 year super cycle is embedded with five 3 year cycles. The dollar’s last 15 year super cycle peaked in 2001 on month 106, then declined into its third 3 year cycle low. The topping pattern in 2001 is vary similar to the current set up.   The confirmation of a failed 3 year cycle confirms that the dollar has begun its 15 year super cycle decline.  Once the dollar began its 15 year super cycle decline back in 2002 there was a rapid decline to the 50 month MA, as the dollar is currently doing.

May, 2016 hosted the 3 year cycle low, which was a shortened 3 year cycle of only 24 months. Since most times cycle balances themselves out, the dollar is positioned for the current 3 year cycle to be a stretched 3 year cycle to coincide with the start of the 15 year super cycle decline. And a stretched 3 year dollar cycle decline aligns with gold beginning a new multi year bull cycle.  

Stocks

Stocks broke out to a new high on Wednesday, day 21.  That assures us of a right translated daily cycle formation and provides more evidence that August 21st hosted the ICL.

After printing a new daily cycle high on Wednesday, stocks drifted lower into Friday.  But Friday's bullish closed allowed stocks to remain above the 10 day MA.  If a swing low forms then that would indicate that Thursday was a very mild half cycle low.  If stocks continue lower and break below Wednesdays' low of 2496.67 that will form a swing high to indicate the daily cycle decline.  However, stocks remain locked in a daily uptrend so any dip is a buying opportunity. Stocks will continue it its uptrend until it closes below the lower daily cycle band.

A right translated daily cycle formation along with closing above the upper weekly cycle band assures us that week 42 hosted the ICL.  Stocks continue to close above the upper weekly cycle band indicating a weekly uptrend.  They will remain in their uptrend until they close below the lower weekly cycle band.

Stocks broke out to a new high in September locking in a right translated yearly cycle formation. Stocks are deep in their timing band for seeking out their yearly cycle low. Since stocks printed a new high in September, the earliest a monthly swing high can form will be in October.  A monthly swing high accompanied by a break of the monthly trend line will confirm the yearly cycle decline. With every indication that a new intermediate cycle has just begun, the earliest a yearly cycle low can form would be at the next intermediate cycle low, which will extend the yearly cycle by another 4 - 6 months.