I want to start off this week with a little housekeeping. In real time, Friday December 27th looked as if an 11 day daily cycle low printed for the dollar. Suffice it to say that a shortened 11 day cycle is an anomaly. And if 12/27 was an 11 day daily cycle low then we have a right translated cycle forming as a failed daily cycle. That would make for 2 anomalies. There just seems to be too many exceptions to the rule here.
In retrospect I believe that the dollar printed a fake out low on 12/11. So labeling 12/27 as a 26 day daily low instead of an 11 day daily low dismisses any anomalies and brings our cycle counts into their normal timing bands.
Coming out of the October intermediate low the dollar first formed an 18 day right translated cycle followed by a failed, left translated 26 day daily cycle. The current daily cycle has printed a new daily cycle high at day 14. At 14 days, this daily cycle is now likely to form as a right translated cycle. The dollar is also closing in on the early November high.
A failed daily cycle followed by a right translated cycle is normally associated with a new intermediate cycle. Should the dollar break above the early November high of 81.48 we will be need to consider labeling this daily cycle as the first daily cycle of a new intermediate cycle.
But the weekly charts prevent us from embracing 12/27 as an intermediate low.
The daily equity cycle emerged out of the December daily cycle low and peaked at day 8. After an 8 day decline stocks set a half cycle low.
Then stocks rallied for two days and printed a higher daily cycle high on day 18. A swing high was formed off day 18 peak. Should stocks break below the daily cycle trend line that would signal daily cycle decline. And if day the day 18 peak stands, there is still a chance that this cycle will form as a left translated cycle that declines into an intermediate cycle low.
There has been a persistent bearish divergence developing on the True Strength Indicator. This is another signal of an impending cycle decline.
This is the 4th daily cycle of the current intermediate cycle. Intermediate cycles tend to comprised of two to three daily cycles. So this being a fourth daily cycle increases the likelihood that this daily cycle will conclude as part of an intermediate cycle decline.
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