Stocks delivered bullish follow through on Thursday.
Stocks printed their lowest point point on 9/12 following the mid-August peak. September 12th was day 53, placing stocks deep in their timing band for a daily cycle low. Stocks finally formed a swing low on Wednesday signaling a new daily cycle. Closing above the upper daily cycle band confirms that Thursday was day 8 of the new daily cycle.
While it is clear that stocks are in a new daily cycle, the daily cycle count for the dollar is unclear.
The dollar printed an extended 39 day daily cycle low in August. That extended daily cycle count is part of the rationale that day 14 hosted a shortened daily cycle low. If day 14 hosted a shortened daily cycle low then that makes Thursday day 10. Which leaves 2 – 3 more weeks before the next daily cycle low is due.
The other possibility is that Thursday was day 24. A day 24 scenario makes this a bullish scenario for the dollar with the dollar peaking on day 23. That would form an extremely right translated cycle formation. That would also place the dollar in its timing band for a daily cycle low. Then a break above 95.49 forms a daily swing low and signals a new daily cycle.
However a close below the lower daily cycle band would also shift the odds toward a left translated daily cycle formation and indicate that the dollar is in its intermediate cycle decline.