Weekend Report Preview

The Dollar

The dollar confirmed a new daily cycle.

The dollar has rallied off of support from the 200 day MA to close above the 10 day MA and turned it higher.  It also managed to close above the 50 day MA confirming day 14 as an early DCL. Closing above the upper daily cycle band ends the daily downtrend and begins a daily uptrend.  It also indicates the dollar has begun a new intermediate cycle.

The dollar has regained both the 200 week MA and the 10 week MA.  It has also broke above the declining weekly trend line to signal that week 16 hosted an early ICL.  The dollar is in a weekly uptrend.  It will remain in its uptrend unless it closes below the lower weekly cycle band.

The yearly dollar cycle peaked on November, month 9.  It printed it lowest point in January, month 11, placing the dollar in its timing band for a yearly cycle low.  There has not been a failed weekly cycle to confirm the yearly cycle decline which makes February month 12 for the yearly dollar cycle.   The dollar is in a monthly uptrend.  It will remain in its monthly uptrend unless it closes below the lower monthly cycle band.

Closing above the upper monthly cycle band in October confirms that February 2018 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 ran into resistance at the 200 day MA and turned lower.

Stocks formed a swing high and did break below the daily cycle trend line to indicate that the daily cycle decline has begun.  Friday was day 30, placing stocks in the early part of its timing band for a daily cycle low.  The over 3240 million in Selling on Strength prior to the daily cycle peak has me expecting a deeper correction.   Stocks should close below the 10 day MA and turn it lower before printing its daily cycle low.  But stocks printed a bullish reversal on Friday.  If stocks form a swing low here that would trigger a cycle band buy signal.  A close back above the 200 day MA would indicate that day 30 was a half cycle low.

This is week 6 for the intermediate cycle & stocks ran into resistance at the 50 week MA, which sent stocks drifting lower. However, the weekly chart continues to develop bullishly.  Since we suspect that week 46 marks the YCL, our expectation is to see this first intermediate cycle form as a right translated weekly cycle.  Stocks are in a weekly downtrend.  They will remain in its downtrend unless they close above the upper weekly cycle band.

December was month 10 for the yearly equity cycle, placing stocks in their timing band for a yearly cycle low. Therefore, the new intermediate cycle should trigger the start of a new yearly cycle.  A monthly swing low is required to form a yearly cycle low.  A break above 2800.18 will form a monthly swing low.

Stocks print their multi-year cycle low on average every 44 months.  The last multi-year low formed in 2016 at 51 months.  With that multi-year cycle being slightly stretched indicates that this one could be shortened.  Therefore it is possible that December hosted a shortened, 34 month, multi-year low.  A close back above the upper monthly cycle band will confirm that December was the multi-year low.