Cycle Trading: The Weekend Report Preview

The Dollar

Friday's bullish reversal at support off the 50 day MA sets up for a daily cycle low to form.

The dollar printed its lowest point on Friday, day 24.  That places the dollar in its timing band for a daily cycle low. Friday's bullish reversal off of support from the 50 day MA eases the parameters for forming a daily swing low.  A  break above 93.09 forms a daily swing low.  A close back above the 10 day MA will indicate a new daily cycle. The dollar is in a daily uptrend & will remain so unless it closes below the lower daily cycle band.

 

The dollar closed above the 10 week MA & the 200 week MA the previous week to confirm that week 31 hosted the ICL. The dollar appears to have successfully back tested the 10 week MA.  Remaining above the 10 week MA aligns with the dollar emerging from the YCL. Still, the dollar is in a weekly downtrend & will remain so until it can close 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.

The dollar printed its lowest point in September.  At 16 months, that places the dollar deep in its timing band to form a yearly cycle low. The dollar has formed a monthly swing low which signals a new yearly cycle.  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.

The dollar has broke below the previous 3 year cycle low in September to form 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 continued higher printing a new high on Friday, day 37.

Stocks are in their timing band for a seeking a DCL.  At this point a swing high and close below the 10 day MA will signal the daily cycle decline.  Stocks continue to close above the upper daily cycle band to indicate a daily uptrend.  Stocks will remain in their uptrend until they close below the lower daily cycle band.

This is week 7 for the new intermediate cycle. 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 October 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 October, the earliest a monthly swing high can form will be in November.  A monthly swing high accompanied by a break of the monthly trend line will confirm the yearly cycle decline. Now that stocks are in a new intermediate cycle, 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.