The dollar printed a bearish reversal on Friday.
We discussed how the 97 level was a resistance level for the dollar. The dollar had four attempts to close above it and was soundly rejected by it on Friday. This has me expecting the dollar to now decline into its daily cycle low. Since the previous daily cycle was shortened we could see an extended daily cycle form here, which would make it likely to see a left translated daily cycle formation.
The dollar has not yet completed its yearly cycle decline. A left translated daily cycle formation would align with the dollar completing its yearly cycle decline. And a left translated daily cycle formation would indicate that this is week 21 for the intermediate dollar cycle.
A complete breakdown of the dollar’s daily, weekly, yearly and multi year cycles can be found in the Weekend Report.
Stocks closed above the 200 day MA on Friday.
Friday was day 35, placing stocks in their timing band for a daily cycle decline. And stocks continue to print large SOS days. Now 11 of the preceding 16 days printed strong Selling on Strength numbers.
* Stocks are in their timing band for a daily cycle decline.
* Stocks continue to print SOS numbers which are harbingers that a cycle decline is imminent.
* Bearish divergences are developing on the oscillators which typically precede a cycle decline.
Once a swing high forms it will likely send stocks into their daily cycle decline. But stocks are in a daily uptrend. once the cycle decline begins, if the swing low forms above the lower daily cycle band that will mean that stocks remain in their daily uptrend and that would trigger a cycle band buy signal.
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