The dollar broke below the previous intermediate low on Monday forming a failed intermediate cycle.
The dollar began to rally on Tuesday. It regained the 200 day MA and formed a swing low on Wednesday. The dollar closed above the lower daily cycle band on Thursday to confirm a new daily cycle. The dollar closed higher on Friday, providing more bullish follow through.
Friday was day 4 and the dollar closed just below the 50 day MA. We will see on the weekly chart (discussed in the Weekend Report) that the dollar just printed week 15 for the intermediate cycle, which is still shy of the timing band for an intermediate cycle low. There is still time for the dollar to print one more failed daily cycle. But the bullish weekly reversal on the weekly chart suggests that an early intermediate low has printed. We will need to watch the 50 day MA next week. Rejection by the 50 day MA will likely mean that the dollar will print one more failed daily cycle before printing the intermediate low.
Stocks dropped over 126 points between Monday & Tuesday.
However stocks bounced back on Wednesday and formed a daily swing low on Thursday. Monday, day 34, was the lowest point since the day 9 peak. Stocks closed out the week on Friday right up against the declining trend line. At day 34, stocks are in their timing band to print a daily cycle low. A break above the declining trend line will signal a new daily cycle. I would like to see a close above the lower cycle band (approx 2016) for further confirmation.
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