The dollar printed a new daily cycle high today.
Monday was day 25 for the dollar’s daily cycle. And although the dollar made another higher high today, the True Strength Indicator continued trending lower. The dollar has essentially move the sideways for the past five days. This has lessened the distance needed to breach the daily cycle trend line, which the dollar will need to do before printing a daily cycle low. The dollar still needs to print a swing high before declining into a daily cycle low. A break below 84.26 now forms a swing high.
Since peaking on day 19 stocks have been moving steadily lower and appear to be headed into a daily cycle low. But tonight I wanted to show you the weekly chart. Stocks formed a weekly swing high last week. Breaking lower today has caused stocks to deliver a bearish crossover on the weekly True Strength Indicator. And a bearish crossover on the weekly TSI is a reliable indicator of an intermediate cycle decline.
Bonds have been in a daily cycle decline since late August.
The daily bond cycle peaked on day 7. Bonds broke below the previous daily cycle low on Wednesday producing a failed daly cycle. They continued to decline into Friday, which was day 16. Today bonds formed a swing low. A break above the daily cycle trend line will confirm a new daily cycle. The failed daily cycle signals an intermediate cycle decline for bonds. So we can expect that the rally into a new daily cycle should be short lived.