The dollar printed a new high on day 17 that all but guarantees that this will result in a right translated cycle.
Friday was day 17 for the daily dollar cycle. The bearish reversal on Friday gave back nearly all the gains from Thursday. It has also eased the parameters for forming a swing high. A break below 87.54 forms a swing high and then a trend line break confirms the daily cycle decline.
With a right translated cycle virtually assured here then our expectation is that following the anticipated daily cycle decline we should see one more daily cycle for the dollar which should then, fail.
While stocks printed another higher high, the selling on strength continues to add up.
Our expectation is for the first intermediate cycle that emerges from an intermediate low form as a right translated cycle. The new high on Friday, day 17 begins to shift the likelihood that this cycle will form in a right translated manner.
The previous daily cycle set a new all time high on day 30, before declining into an intermediate cycle low. Stocks printed two 300 plus SOS days, over the past two weeks, as it approached the previous high. But noticed that once stocks closed above the previous high that the SPY printed some huge SOS days. That is the Big Boys handing the bag to the technicians chasing the break out.
There has been over 3.3 billion in Selling on Strength so far. This exceeds the type of selling that I would expect at an intermediate top. Therefor, we will need to consider that this daily cycle may fail. However, I think that it is more likely that we will still see a right translated daily cycle form here, but the next daily cycle will roll over early and fail, leading to an intermediate cycle decline.
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