The weekly dollar cycle has already formed a weekly swing high. Therefore we can expect left translated daily cycles to form as the dollar continues into its intermediate cycle low. Wednesday was day 15 for the daily dollar cycle. Thursday the dollar formed a swing low and Friday saw the dollar break through the declining trend line before printing a bearish reversal.
Was Wednesday a 15 day daily cycle low? Wednesday was three days short of the normal timing band for a daily cycle low. And I would have preferred to see a more convincing trend line break on Friday. However I believe that we need to keep an open mind that Wednesday was a daily cycle low.
The daily equity cycle peaked on day 36, which locks in a right translated nature to the daily cycle. Following a right translated cycle, stocks should go on to print a higher daily cycle high.
When stocks reversed higher and formed a swing low off the day 39 print we had a potential daily cycle low. Since stocks failed to make a higher daily cycle high our primary view is that Thursday was day 45 for the daily equity cycle. We often see a lower Bollinger Band breach at a daily cycle low. Thursday delivered a lower Bollinger Band breach. Stocks printed an inside day on Friday, which means Friday could be day 46 or could be day 1 of a new daily cycle. A break above 1772.28 forms a swing low.
If Thursday does mark a daily cycle low then stocks have begun their fourth daily cycle to the current intermediate cycle. Most intermediate cycles are comprised of 3 daily cycles. Which means that once a new daily cycle begins, it will likely be the terminal daily cycle to the intermediate cycle. Therefore the expectation will be to see a left translated daily cycle form, peaking by day 20.
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