Day 19 is undeniably a cycle peak. Whether Friday was day 15 or day 35 needs to be explored.
Our cyclical expectation is to see a right translated cycle be followed by a higher high. The dollar’s failure to do so following the day 20 low forces us to view Friday as day 35.
Friday being day 35 is a scenario that fits into pattern we have seen before with the dollar. The pattern of the dollar breaking through an important moving average only to reverse and trend the other way. This fits well with May hosting the three year cycle low. Then this is an extended daily cycle that does not fail and is building up energy for the next leg higher.
This (blue highlighted area) also reminds me of the dollar’s behavior emerging from the 2011 three year low.
In 2011 the dollar also came out quickly, broke above an important moving average only to lose it later in the daily cycle. The day 12 squiggle in 2011 left some doubt if an early cycle low printed.
That first daily cycle in 2011 did not fail and after further consolidation the dollar did go on a 10 handle rally. And Friday being day 35 supports this type of scenario unfolding.
On the other hand, if day 20 is the daily cycle low that would make the May cycle a 20 day right translated daily cycle.
And if day 20 is the daily cycle low the ensuing daily cycle peaks on day 8. The next day the dollar then breaks below the day 20 low producing a failed daily cycle. And it seems that what we see developing on the weekly charts supports this scenario of Friday being day 15.
Earlier in June stocks formed a day 39 peak and then left behind a 42 day right translated daily cycle low.
The new daily equity cycle peaked on Tuesday, day 8 and then has traded in a narrow range. At 20 weeks the intermediate cycle has entered its timing band to seek out an intermediate low. A failed daily cycle is necessary to begin an intermediate cycle decline. A peak on day 8 fits well in this framework.
While stocks have gone on to print a higher high following the day 39 peak in early June, the transports have failed to follow suit. This new daily cycle for the transports has not exceeded the early June high. There is a bearish TSI divergence which signals that the way is lower. A break of the daily cycle trend line will send the transports into a daily cycle decline.
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