The dollar has breached a significant resistance level.
The past three times the dollar has hit the 89 level it declined into either a major yearly low, 3 year low, or a 15 year low. At 7 months the dollar has entered the timing band to seek out yearly cycle low. A left translated, failed weekly cycle is required for the yearly cycle decline. The 89 resistance level could send the dollar into a yearly cycle decline.
The daily equity cycle peaked the previous Friday on day 26. Then declined all week into Friday, which was day 41. Stocks are in their timing band to print a daily cycle low. A swing low and trend line break signals a new daily cycle.
Stocks dropped over 73 points this week. Only one other time over the past 28 months that saw stocks dropped over 70 points in a week and that occurred during the intermediate cycle decline.
An intermediate decline at this point would likely take out the October low, producing a failed yearly cycle. In the Weekend Report we will look at that last two times stocks printed a failed yearly cycle. But stocks printed a huge, 1.7 BILLION Buying on Weakness on Friday. That is the largest BOW number that I have ever seen for the SPY. I did not notice that number building during the day so it surprised me to see it there at the end of the day. I know that we have been tracking the SOS numbers but I have to think that Friday trumps the SOS numbers that we have been seeing.
To put this in perspective, the total BOW leading into the October intermediate low was 3.131 Billion. The total accumulated BOW for this daily cycle, so far, is 4.501 Billion.
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