Weekend Report Preview

The Dollar

The dollar broke above the day 5 high on Tues, day 13, shifting the odds towards a right translated daily cycle formation.

Friday was day 16, placing the dollar 2 days shy of its timing band for a daily cycle decline.  The dollar closed below the 10 day MA on Friday to signal that the daily cycle is in decline. The dollar will need to break below the daily cycle trend line to confirm the daily cycle decline. The dollar is firmly in a daily uptrend.  It will remain in its uptrend unless it closes below the lower daily cycle band.

Week 8 remains as the intermediate cycle high.  The peak on week 8 sets up a possible left translated weekly cycle formation. A close below the 10 week MA will confirm the intermediate cycle decline.  The dollar is in a weekly uptrend.  It will remain in its weekly uptrend until it closes below the lower weekly cycle band.

The dollar closed above the upper monthly cycle band in October and then closed higher for November.  The new high in November, month 9, shifts the odds towards a right translated yearly cycle formation.  At 9 months, that places the dollar in its timing band for a yearly cycle low. The possible left translated weekly cycle formation would align with the dollar declining into its yearly cycle low.  The dollar will need to form a monthly swing high to begin its yearly cycle decline.  A break below 95.48 forms a monthly swing high.

Closing above the upper monthly cycle band in October confirms that February hosted the 3 year cycle low.  The 15 year super cycle decline has begun.  As long as the dollar does not form a higher yearly cycle high then it will remain in its 15 year super cycle decline. 

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 similar to the current set up.   The confirmation of a failed 3 year cycle back in August, 2017 confirms that the dollar has begun its 15 year super cycle decline (bear market).  Therefore we are looking for the dollar to be rejected by the declining multi year trend line to continue its decline into the 15 year super cycle low.

 

Stocks

Stocks printed their lowest point on Monday, day 28.  A bullish reversal on day 28 has good odds of being the DCL.   But with the banks, the Russel and the Transports all breaking lower on Friday, stocks are likely to follow.

Friday was day 32 for the daily equity cycle.  That places stocks in their timing band for a daily cycle low.  An undercut of the day 28 low should maximize bearish sentiment, getting everybody on the wrong side of the boat.  A likely trigger for the DCL would be the FOMC meeting on Wednesday.  Stocks are still in a daily downtrend.  They will remain in its downtrend unless they close above the upper daily cycle band.

Stocks broke below the week 38 low, extending the intermediate cycle decline.  Once stocks confirm a new daily cycle it will likely trigger the ICL.  A weekly swing low & close above the declining 10 week MA is needed to confirm the new intermediate cycle.

Stocks peaked in September, month 7.  They formed a swing high in October to signal the yearly cycle decline.  The 10 month MA has also begun to turn lower, which is another indicator of the yearly cycle decline.

Stocks broke lower in December, month 10, placing stocks in their timing band for a yearly cycle low. Once a new intermediate cycle is confirmed, it has good odds of marking the yearly cycle low.  Despite the recent volatility, stocks remain firmly in a yearly uptrend.  If the monthly swing low forms above the lower monthly cycle band, then stocks will continue in their monthly uptrend.