Cycle Trading: Weekend report preview

The Dollar

The dollar peaked on day 14.  It formed a swing high and closed below the 10 day MA the next day to signal the daily cycle decline.  

The dollar printed its lowest point on Thursday, day 20, placing it in the early part of its timing band for a daily cycle low.  While the dollar did form a swing low on Friday, it remained contained by the declining 10 day MA.  Rejection by the 10 DMA would continue the daily cycle decline.  Currently, the dollar is in a daily downtrend. A break below the previous daily cycle low of 65.70 will form another failed daily cycle. And with Friday being only day 21, the dollar could trend lower for another 2 to 3 weeks before printing its daily cycle low.

Stocks

Stocks broke above the 3150 resistance level on Monday and then coiled above the resistance level this week.

This allowed the 10 day MA to catch up to price on Thursday.  On Friday, stocks formed a bullish reversal and closed above the coil.  Stocks formed a swing low on Friday to close at a new daily cycle high.  We will use Friday’s swing to construct an accelerated daily cycle trend line. The new high on day 18 begins to shift the odds towards a right translated daily cycle formation.  Which means it is likely that stocks will need one more daily cycle , following this one, to usher in the intermediate cycle decline.  Stocks are in a daily uptrend. They will remain in their daily uptrend unless they close below the lower daily cycle band.