Destined

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The swing low printed by the dollar on Friday indicated the possibility of a 14 day daily cycle low being left behind. The dollar negated that swing low by closing lower today.

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We discussed here over the weekend that in order for day 14 to be an early daily cycle low, the dollar would need to break above the declining trend line. Instead of breaking above the declining trend line, the dollar was rejected in a clear and convincing manner by the convergence of the 50 day MA and the 10 day MA. The dollar peaked on day 8 and now the dollar has been in decline for 8 days. It appears that the dollar is now destined to seek out its daily cycle low.

spx

The daily equity cycle peaked on day 10 and has been in decline since. Stocks lost the 50 day MA on Thursday and today closed below the lower cycle band. The close below the lower cycle band indicates that stocks on in an intermediate cycle decline. With another 8 days until stocks enter their timing band for a daily cycle low, stocks are destined to easily break below the previous daily cycle low of 2067.93 and possibly make a run at the 200 day MA, which currently sits at 2045.77.

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3 thoughts on “Destined

    • Samano3,

      Yes, I meant to comment on the big BOW today, then it slipped my mind. A number like 634 million BOW is the type of number that we see as we head into an intermediate cycle low. This intermediate cycle is extremely right translated with a peak on week 31. Right translated cycles are destined to go on to print higher cycle highs. And the large BOW # today may be signaling the intention of stocks to print a higher high once the cycle low is in. While we could see a bounce here, we tend to see several BOW’s as we head into an ICL.

      LM

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