Dollar Suspicion

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The energy sector printed a bullish reversal last week.

xle weekly

Last week was week 22 for the energy sector’s intermediate cycle. That places the energy sector in its timing band for print an intermediate cycle low. A new daily cycle has started and this may also signal a new intermediate cycle. A weekly swing low is required to mark the intermediate cycle low. A break above 56.12 will form a weekly swing low. Then a close above the lower weekly cycle band will indicate a new intermediate cycle. The bullish divergence developing on the True Strength Indicator signals that not only is an intermediate low is imminent, but also a yearly cycle low.

gdx weekly

The Miners have formed a weekly swing low. Last week was week 19 for the intermediate Miner cycle. The Miners have begun a new daily cycle and the weekly swing low signals that a new intermediate cycle has also begun. Once again there is a bullish divergence on the True Strength Indicator that signals not only has an intermediate low been left behind, but also a yearly cycle low.

And the reason for this I suspect is the dollar.

$$$

The dollar has been in a mini uptrend since emerging from the early December cycle low. The dollar printed an exhaustion candle on day 7 and appears to be rolling over. A bearish crossover has formed on the True Strength Indicator. A break below 98.99 will form a swing high. Then a break of the daily cycle trend line will confirm the daily cycle decline. A peak on day 7 has goods odds for a left translated cycle formation, which usually results in a failed daily cycle. A failed daily cycle will send the dollar into its intermediate cycle decline.

But I think something bigger is developing here for the dollar. I think that a failed daily cycle may also lead to the yearly cycle decline and the 3 year cycle decline. All of which I plan on covering in this week’s Weekend Report.

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One thought on “Dollar Suspicion

  1. Pingback: The 1/28/16 Morning Report | Cycle Trading

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