Friday was day 16 for the dollar’s daily cycle. The new high on day 16 indicates a right translated daily cycle formation. The dollar also closed above the upper daily cycle band. Closing above the upper daily cycle band ends the daily downtrend and begins a new daily uptrend. It also indicates that the intermediate cycle low has been set.
Stocks formed a swing high on Thursday and then closed below the daily cycle trend line on Friday to confirm the daily cycle decline. Friday was day 35 for the daily equity cycle, placing stocks in their timing band for a daily cycle low.
Notice that the previous daily cycle decline only lasted 3 days and the swing low formed above the upper daily cycle band. That is a signal that stocks have begun a melt up that is characterized by brief corrections. So it is likely for the DCL to arrive early next week.
While we will not be able to know how long stocks will continue in this melt up what we do know is that this usually ends in a crash. Stock are in a daily uptrend. Will will use a close below the upper daily cycle band as a signal of a larger correction.
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