Treading Water

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The Daily equity cycle did not do much today besides tread water today.

SPX Index Price Chart for S P 500 Index

We are watching to see if stocks set a new high or break below the daily cycle trend line. A break to new highs here would indicate that this cycle will likely form in a right translated manner, printing a higher low. A break below the daily cycle trend line keeps alive the possibility that this cycle form in a left translated manner that would print a lower low.

DXY00 Commodity Futures Price Chart for U S D

Even though the dollar closed lower today, it did not further our framework. If the dollar continues lower and breaks below 80.444 that means that the dollar is continuing down into a daily cycle low. If the dollar breaks to new highs I am not 100% comfortable labeling Tuesday as an 11 day daily cycle low. I believe that it is prudent to be open to the possibility that Tuesday was a half cycle low for the dollar.


Gold also appears to be treading water. After peaking on day 9, gold has been trading sideways. The trend line break does signal the a daily cycle decline has begun. But if gold breaks above 1255.10, then that will negate the trend line break.


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