The dollar formed a failed daily cycle the previous week. After a brief counter trend rally this week the dollar was rejected by the 10 day MA and continued lower.
Friday was day 19 for the daily dollar cycle. At 19 days, the dollar has entered its timing band for a daily cycle low. The previous 3 daily cycles ran from 24 days to 34 days. There are some long term things taking shape with the dollar that has only happened twice over the past 35 years. This is something that we will look at in the Weekend Report.
An early daily cycle low appeared to have formed on day 26. But stocks could not break convincingly above the declining trend line. And once the selling started on Tuesday, it accelerated into Friday.
Stocks broke below the 200 MA on day 26, but managed to recover. That positive close on day 26 makes me think that the Fed tried to intervene and force an early daily cycle low. But with a day 9 peak, this daily cycle had locked in a left translated nature. Now at day 33 stocks are in their timing band to print a daily cycle low. I do not think that the selling has exhausted itself and I think that we need to see a narrow range day that prints a lower low. That would ease the parameters for forming a daily cycle low. However I believe that the Fed realizes the danger the stock market is in. I cannot imagine that they will let the market continue lower without trying to intervene. Perhaps that explains the huge BOW number that printed on Friday.
If the Fed cannot halt the decline next week, I think that the October low is in jeopardy. A break below that would form a failed yearly cycle. I discuss that at length in the Weekend Report.
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The Weekend Report discusses Dollar, Stocks, Gold, Miners, The CRB Index, & Bonds in terms of daily, weekly and yearly cycles.
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