The Sky is Falling …

Skitch 2014 01 02 18 35 49

This is the fourth daily cycle of the current intermediate cycle. Therefore our expectation is to see this daily cycle form in a left translated manner, peaking on or before day 20. Which will result in an intermediate cycle decline.

$ SPX Sharp Charts Workbench Stock Charts com 2

But simply because a swing high printed today along with a bearish crossover on True Strength Indicator does not mean that the sky is falling. Stocks could be setting a daily cycle trend line. In the absence of a trend line break a close below the 10 MA would signal a daily cycle decline. And a break below the break out level (dotted grey line) would confirm it for me. Having said that, I still believe that stocks will break above the 1900 level.

levels

And that is because major pivots seem to like these big numbers and tend to overshoot them. And I believe that 1900 is too big of a target to ignore. But as previously mentioned a close below the 10 MA is our signal.

Now the dollar chart just got more complicated today.

DXY00 Commodity Futures Price Chart for U S D

The dollar had a big day today and today’s rally broke above the declining black trend line. Normally a trend line break is a signal of a new daily cycle. But that would mean that the dollar left behind an 11 day cycle low, which is 7 days shy of its normal timing band. The dollar was contained by the declining (red) trend line. If the dollar reverses and goes lower here then I would view this as noise. However since day 11 broke below the previous low, a break above the day 7 high of 80.83 would confirm a new daily cycle.

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One thought on “The Sky is Falling …

  1. Likesmoney,
    As of 10:30 am Friday your comment about the $ being more complicated looks to be an understatement. $ seems to want to through a wrench into the PM machine. Who wins at the bottom, ‘ Gold or Dollar ‘?
    Jack Dog

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