The dollar breaking lower on Tuesday

The Dollar

The dollar breaking lower on Tuesday signaled that it is still declining into its yearly cycle low. The decline into the yearly cycle low is obscuring our daily cycle counts. What is clear is that the dollar is in a daily downtrend. The dollar will continue in its daily downtrend until it closes above the upper daily cycle band.

Under the premise that a cycle cannot failed, then break to a new high without beginning a new daily cycle leads me to believe that day 39 hosted the DCL instead of June 5th. That would mean make Friday day 27, placing the dollar in its timing band for a daily cycle low. With the TSI at a level that has marked other DCL's, once a swing low forms it will likely signal a new daily cycle.

The dollar broke lower this week which negated the previous week's swing low & extends the intermediate cycle out to week 21. The dollar is in its timing band to print an ICL. Therefore, once the dollar forms a DCL, it should also trigger the ICL. The dollar is in a weekly down trend & will continue in its downtrend until it closes above the upper weekly cycle band.

June is month 13, placing the dollar in its timing band to print a yearly cycle low. A monthly swing low is required to form a yearly cycle low. A break above 97.51 would form a monthly swing low.

The dollar printed a failed yearly cycle 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 June, 2017 month 13 for the new 3 year cycle. The dollar has now broke convincingly below the 3 year trend line, indicating that start of the 3 year cycle decline. If that is the case then the subsequent yearly cycles should form as left translated yearly cycles until the 3 year cycle low forms. And if the 3 year cycle decline has begun, then it is setting 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. There are some similarities developing to the current set up. Currently, the dollar has printed a new high in January, which is month 105 for the 15 year super cycle. Which is about when the previous super cycle rolled over into its 15 year super cycle decline. At the previous super cycle peak the dollar was quite stretched above the 200 month MA as well as the 50 month MA — as it is was in January. There are bearish divergences developing on the momentum indicators that also appeared at the previous 15 year super cycle peak.

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, we could be poised for the next 3 year cycle to be a stretched 3 year cycle just as the dollar is ready to begin its 15 year super cycle decline. And a stretched 3 year dollar cycle decline would align with gold beginning a new multi year bull cycle.

Stocks

After peaking on day 21, stocks formed a swing high and broke convincingly below the daily cycle trend line on Tuesday to confirm the daily cycle decline.

Stocks printed their lowest point on Thursday, tagging the 50 day MA. Thursday was day 29, placing stocks 1 day shy of its timing band for a daily cycle low. A swing low and a break of the declining trend line will confirm that day 29 hosted the daily cycle low. Stocks remain in a daily uptrend. Stocks will continue in their uptrend until it closes below the lower daily cycle band.

Stocks formed a weekly swing high this week.

The weekly swing high formed off the week 33 peak. That makes this week 34 for the intermediate cycle. This is a very stretched intermediate cycle. There are bearish divergences developing on the weekly oscillators. All of which signals an imminent intermediate cycle decline. However a break of the weekly trend line is required to confirm the intermediate cycle decline. Stocks are in a weekly uptrend & will continue in its weekly uptrend until it closes below the lower weekly cycle band.

May is month 16 for the yearly equity cycle. The new high locks in a right translated yearly cycle formation. Stocks are deep in their timing band for seeking out their yearly cycle low. A monthly swing high accompanied by a break of the monthly trend line will confirm the yearly cycle decline. A break below 2405.70 will form a monthly swing high. So if an intermediate cycle decline is confirmed, it will also indicate that the yearly cycle decline as well.