The dollar began the week being decisively rejected by the 50 day MA. However, the swing low that formed on Friday sets up a possible early daily cycle low.
Friday was likely day 15 for the dollar’s daily cycle. But a break of the declining trend line would signal that the dollar has begun a new daily cycle. However, if the dollar continues lower and breaks below the previous cycle low of 94.05 it will form a failed daily cycle and confirm the continuation to its intermediate cycle decline.
Stocks have not delivered a clearly identifiable daily cycle decline since peaking on day 34, until Friday.
Day 47 did place stocks late in their timing band for a daily cycle low. Then stocks did not break above the day 34 high of 2193.81 to confirm a new daily cycle. So Friday’s break lower signals a continuation of the daily cycle decline. And 52 days places stocks very late in its timing band for a daily cycle low.
The late daily cycle count indicates that this daily cycle decline will be short-lived. And as big of the drop was on Friday I will remind everyone that stocks delivered an even bigger drop back in June. The break for consolidation should yield a trending move. The current daily cycle decline will allow for everyone to “get on the wrong side of the boat”. That will set up a false break down out of the consolidation. Since the current daily cycle has formed as a right translated cycle, the new daily cycle should break out to new highs.
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