The dollar formed a swing low on Monday.
The dollar’s daily cycle peaked on day 26. The dollar printed its lowest point last Tuesday, day 32 and then traded within Tuesday’s range since then. With the dollar being late in its timing band for a daily cycle low, this swing low has good odds of marking the daily cycle low. However, any rally out of this daily cycle low may be short-lived.
The intermediate dollar cycle peaked on week 15. It formed a weekly swing high in week 16. Now on week 17 it appears that the dollar will begin a new daily cycle. The timing band for an intermediate low begins next week, so a new daily cycle will take the dollar deep into its weekly timing band for an intermediate cycle low. Therefore we can expect that this daily cycle form in a left translated manner and fail, leading to the intermediate cycle decline.
Stocks backtested both the 50 day MA and the declining cycle trend line today.
If stocks lose the 50 day MA then we will need to be open to the possibility that stocks could print a lower low, negating the day 31 low and extending the daily cycle.