The Big Picture


I would like to start of today looking at the Big Picture for the dollar.


The dollar’s three year cycle peaked in July at 26 months. Then it broke below the three year cycle trend line in September and printed a yearly cycle low in October. The dollar is currently four months into a new yearly cycle that should conclude hosting both a yearly and three year cycle low.


The intermediate cycle that emerged from the yearly cycle low peaked on week 2. A peak on week two locks the dollar in an extremely left translated that is likely to fail. The dollar broke below the intermediate cycle trend line on week 16 confirming the intermediate cycle decline. A weekly swing low has formed off of week 17 which might point to an intermediate cycle low. A break above the intermediate cycle trend line will cause us to consider that week 17 hosted the intermediate cycle low. But due to the bigger three year cycle picture, I believe that this the dollar is setting the declining cycle trend line.

DXY00 Commodity Futures Price Chart for U S D

We see that the previous daily cycle failed on day 15 and printed a daily cycle low on day 18. This new daily cycle drifted lower after day 1. On day five the dollar did manage to break higher. This does not look like a new intermediate dollar cycle. The dollar typically rockets out of an intermediate low. The current rally is averaging a rise of only 0.09 cents a day. Intermediate cycles can see rises of .30 cents a day or more. Therefore I think that this daily cycle is a continuation of the current weekly cycle, now on week 18. I expect to see this daily cycle peak in the next 3 days and go on to print a left translated, failed daily cycle.

GCY00 Commodity Futures Price Chart for Gold C

We see that gold broke below the daily cycle trend line on the dollar’s strength. Wednesday was day 18 for the daily gold cycle. Gold has entered its timing band to seek out its daily cycle low. A break below 1322.50 forms a swing high, signaling the daily cycle decline.

$ SPX Sharp Charts Workbench Stock Charts com 2

Stocks continue to consolidate after setting new all time highs on Monday. Stocks have lost its momentum, as evidenced by the bearish divergence on the True Strength Indicator. Since this is the first daily cycle of a new intermediate cycle stocks will likely form a right translated daily cycle. Therefore, I think that we will see stocks decline into a half cycle low before going on to a new daily cycle high and forming a right translated daily cycle.


2 thoughts on “The Big Picture

  1. Pingback: Dollar Framework | Cycle Trading

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