The dollar peaked two days after QE Euro was announced. Then the dollar proceeded to consolidate the huge rally out of the three year cycle low. The dollar broke out of consolidation on Thursday in a clear and convincing manner.
The daily cycle that formed during this consolidation peaked on day 6, locking in a left translated nature to this daily cycle. Left translated cycles typically fail, unless they occur during a triangle consolidation. When that happens the daily cycle low is not the lowest point following the cycle peak. The cycle low is the lowest point of the apex prior to the break out, day 15 in this case.
The dollar is due for a failed daily cycle to lead to an intermediate cycle decline. Things are setting up potentially for the dollar to have a short rally that could rollover next week on Jobs Friday with the release of the employment numbers.
The daily equity cycle peaked on Wednesday, day 16. It then formed a swing high on Thursday and delivered more bearish follow through on Friday.
This is the third daily cycle for the current intermediate cycle. As we will discuss in the Weekend Report, stocks are in the timing band to seek out an intermediate cycle low. Therefore we are suspicious that this daily cycle will form in a left translated manner and fail, leading to the intermediate cycle decline.
While bearish signals are beginning to manifest themselves, stocks delivered a conflicting money flow signal. Stocks printed a whopping 1.3 billion Buying on Weakness number on Friday. The BOW (and SOS) numbers are not precise timing tools. But extreme numbers need to be factored into consideration.
Below is the Cycle Tracker, which is a normal feature of the Weekend Report.
Likesmoney Cycle Tracker
As of 2/27/15
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