Schooled

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Last Thursday we discussed how the dollar being rejected by the 50 day MA and also losing the 10 day MA was a textbook set up for a decline into a daily cycle low. Based on how the dollar rallied on Friday and Tuesday, I got schooled.

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Thursday was day 10 for the dollar’s daily cycle. Since it was too early for a daily cycle low we will label it a half cycle low, which makes Tuesday day 12. As long as Day 9 remains as the daily cycle peak then this daily cycle favors a left translated cycle formation. Tuesday saw the dollar close to a new closing high for the current daily cycle. If the dollar breaks to new highs going forward, then that will shift the odds towards a right translated cycle formation. A right translated daily cycle formation would have implications on the intermediate cycle.

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The dollar printed a failed daily cycle during its recent daily cycle low. That confirmed the intermediate cycle decline. The dollar is currently testing the declining weekly trend line. So a break to a new daily cycle high would shift the odds towards a right translated daily cycle formation, which is a signal that a new intermediate cycle has begun. It would also cause a break of the declining weekly trend line, which is another signal that week 24 hosted the intermediate cycle low.

Gold has been holding up well in the face of the rallying dollar.

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Tuesday was day 16 for the daily gold cycle. Despite the dollar closing at a new daily cycle high, gold has not breached its daily cycle trend line. However, if gold does breach the daily cycle trend line that will signal that gold has begun its daily cycle decline. And with the peak being on day 8, a break lower here would lock in a left translated daily cycle formation.

The 2/17/17 Weekend Report Preview

The Dollar
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The dollar broke above the 50 day MA on Wednesday. But then formed a bearish reversal and closed below the 50 day MA. Thursday the dollar formed a swing high to signal the daily cycle decline.

The dollar recovered on Friday. We could see the dollar back test the 50 day MA before continuing into its daily cycle decline. A “kiss good-bye” will set up a declining trend line. A peak on day 9 can still result in a left translated failed daily cycle. A break below 99.19 will form a failed daily cycle.

Stocks
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Stocks have entered their timing band to seek out a daily cycle low. Thursday’s new high on day 32 locks in a right translated daily cycle formation.

A swing high and a break of the accelerated trend line will signal the daily cycle decline. Stocks continue to close above the upper daily cycle band remaining in its daily uptrend. Stocks will continue its daily uptrend until it closes below the lower daily cycle band.

Text Book Set Up

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The dollar formed a bearish reversal on Wednesday that failed to close above the 50 day MA. That is a text book set up for a decline into a daily cycle low.

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The dollar delivered bearish follow through on Thursday and formed a swing high. A peak on day 9 can still result in a left translated failed daily cycle.

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The dollar is also in a text book set up for a daily downtrend. A daily downtrend is characterized by peaks forming below the upper daily cycle band and lows printing below the lower daily cycle band. Wednesday’s bearish reversal not only closed below the 50 day MA, it also closed below the upper daily cycle band to maintain the daily downtrend. A break below the previous daily cycle low of 99.19 will form a 2nd consecutive failed daily cycle as the dollar seeks out its yearly cycle low.

In the Weekend Report I plan to break down where the dollar is in its weekly, yearly, 3 year cycle and its 15 year super cycle.

The 02/16/17 Morning Report

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The dollar was rejected by the 50 day MA on Wednesday.

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Wednesday’s bearish reversal eased the parameters for forming a swing high. A swing high has formed overnight. This rejection by the 50 day MA should send the dollar into its daily cycle decline. A peak on day 9 can still result in a left translated failed daily cycle.

And the dollar rolling over has ignited a bullish response from gold.

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Gold has held up well as the dollar rallied out of its daily cycle low. This morning we see that gold has formed a swing low off of Wednesday’s bullish reversal and has delivered a trend line break. That signals that day 13 was a half cycle low. Gold’s daily cycle has been averaging 27 – 33 days since emerging from its multi year low. And now that the dollar appears to be rolling over, gold is poised to run higher.

Potential Inflection Points

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The dollar has been in a daily downtrend that has been characterized by peaks printing below the upper daily cycle band and lows forming below the lower daily cycle band. The dollar reached a potential inflection point on Tuesday.

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Tuesday was day 8 for the dollar’s daily cycle. Left translated daily cycles typically roll over by day 8. The dollar is also up against resistance from the 50 day MA. A swing high here should send the dollar into its daily cycle decline.

Bonds also appear to be at an inflection point.

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Bonds closed above the upper daily cycle band on day 9 trying to re-establish its daily uptrend. It has since formed a swing high and trended lower. Bonds did print a reversal off of the daily cycle trend line on Tuesday. Closing below the 10 day MA and forming a bearish zero line crossover on the TSI are signals that the daily cycle is in decline. Bonds will need to form a swing low here to avoid breaking below the daily cycle trend line, which would confirm the daily cycle decline.

Bearish Dollar Signals

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In the Weekend Report we looked at how the dollar’s weekly cycle set-up has us expecting a left translated daily cycle formation. Today I want to point out some bearish dollar signals

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First off I want to point out that the dollar has established a daily downtrend. It will remain in a downtrend until it can close above the upper daily cycle band.

Second, the True Strength Indicator has reached a level that has previously seen the dollar’s cycle roll over.

The next signal looks at the money flow. For this we need to switch to the ETF UUP

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There has been a huge bearish money flow as the dollar is in the process of printing a lower high.

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The was a similar huge bearish money flow the last time the dollar printed a lower high before its declining into its yearly cycle low.

And the dollar is in its timing band to seek out its yearly cycle low…

The Weekend Report Preview

The Dollar
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The dollar closed above the declining trend line on Thursday and delivered bullish follow through on Friday to confirm the new daily cycle.

Friday was day 6 for the daily dollar cycle. The weekly cycle has us expecting a left translated daily cycle formation. Therefore it is likely that the dollar will be turned lower at the declining 50 day MA. The dollar has established a daily downtrend. It will remain in a downtrend until it can close above the upper daily cycle band.

Stocks
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Stocks broke out to a new high on Thursday and then delivered bullish follow through on Friday to lock in a right translated daily cycle formation.

Friday was day 27 for the daily equity cycle. Stocks are 3 days shy of entering its timing band for a daily cycle low. With stocks breaking higher that allows us to add an accelerated trend line (red dashed). Stocks continue to close above the upper daily cycle band remaining in its daily uptrend. Stocks will continue its daily uptrend until it closes below the lower daily cycle band.

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The Weekend Report discusses Dollar, Stocks, Gold, Miners, Oil, & Bonds in terms of daily, weekly and yearly cycles.
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Dollar Confirms New Daily Cycle

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The dollar printed its lowest point last week on day 37, following the day 16 peak. While the dollar did form a daily swing low the next day, it did not confirm the new daily cycle — until today.

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Thursday was day 5 for the dollar’s daily cycle. Closing above the declining trend line confirms the new daily cycle. In the Weekend Report I plan to discuss why the weekly cycle has us expecting a left translated daily cycle formation for this new dollar cycle. Left translated daily cycles normally peak by day 8. Therefore it is likely that the dollar will be turned lower at the declining 50 day MA

gld daily

Gold has been displaying tremendous relative strength by rallying as the dollar emerged from its daily cycle low. And if day 28 was gold’s daily cycle low then we could see gold consolidate here and even print a half cycle low. This would allow the 10 day MA to catch up to price. Then when the dollar rolls over that should send gold on its next leg higher.

Oil Breaks Lower

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Oil peaked last Thursday, day 16 and formed a swing high on Monday. Then oil broke below the daily cycle trend line on Tuesday to confirm that it has begun its daily cycle decline.

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A peak on day 16 can still result in a left translated daily cycle formation. A break below 50.71 forms a failed daily cycle and also confirms that the intermediate cycle is in decline. And at this late stage in the yearly cycle, an intermediate cycle decline will likely result in the yearly cycle decline.

Bullish Behavior — Revisited

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Back on January 8th we took a look at the Miners bullish behavior. I thought that it would be interesting to see what we were looking at back then and then compare it to what is currently unfolding.

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Back on January 8th we made the observation that the Miners behavior was changing.
The Miners were beginning to behave bullishly, as evidence by closing above the upper daily cycle band. That signaled an end to the daily downtrend and the beginning of a new daily uptrend.

Now let’s look at the current daily chart.

gdx daily

The Miners continued to close above the upper daily cycle band until day 24, where it closed below the upper daily cycle band. While 24 days does place the Miners in their timing band for a daily cycle low, the shallow pullback along with expecting a dollar rally had me skeptical, at the time, that a daily cycle low printed.

The Miners went on and tested the 200 day MA last Wednesday and printed a bearish reversal, which eased the parameters for forming a swing high. It seemed that the Miners were ready to decline into a daily cycle low. Then the Miners closed above the 200 day MA on Monday. That has negated last Wednesday’s bearish reversal and indicates that day 24 did host a daily cycle low.

So while it is unclear if day 24 hosted a daily cycle low, what is clear is that the Miners are continuing the bullish behavior by maintaining their daily uptrend. They will remain in a daily uptrend as long as they do not close below the lower daily cycle band.