We’re at a crossroads today. The SPX has been moving down into a DCL. There is the possibility this could even turn into a larger degree ICL. But today’s reversal opens the door that a market intervention was staged to stop the downward momentum. If so and that’s all we’re going to get for the DCL then it’s going to require a 5th, or maybe even 6th daily cycle before stocks deliver the next real intermediate degree correction.
I anticipated that an intervention could occur today and that is why we exited our TVIX trade. Now we just have to determine whether the DCL was aborted prematurely or if will run to completion. If so then here we come 8000 Nasdaq and an all time high in the SPX is in the cards.
So we’re playing this one day at a time as we try to determine which it’s going to be.
I also think the dollar has likely topped (for this intermediate cycle). I’ll do a video on the dollar soon. Nothing has changed in my opinion. I just miscalculated where the 3 year cycle low occurred. I initially thought it came as a slightly short cycle back in 2016. In fact the 3 YCL came early this year as a slightly stretched cycle. That is why we are getting such a strong rally. The bottom in February was not only an intermediate and yearly degree bottom, but also the largest degree 3 year cycle bottom. But I don’t think the dollar will be able to make new highs. I think the three year cycle is going to left translate and confirm that a cyclical bear market began in early 2017.