Cycle Trading

Bonds broke lower today, printing a lower low.

Monday was day 15 for the daily bond cycle.
Today saw bonds break below the previous daily cycle low.
This break below the previous daily cycle low confirms the continued intermediate cycle decline and also the continued yearly cycle decline.

Bonds did close above the daily open, which eases the parameters for forming a swing low.
A break above 117.72 forms a swing low.
At 15 days, bonds have entered the timing band to print a daily cycle low so a swing low could mark a daily cycle low.

Looking at the weekly chart we see that the previous yearly cycle low printed last March.
The yearly cycle peaked in July during the first yearly intermediate cycle.

The second intermediate cycle possesses a week 9 peak.
During the second weekly cycle bonds broke below the previous weekly cycle low signaling a decline into a yearly cycle low and which now sits at week 20.

The commencement of a new daily cycle could herald a new yearly cycle.

A break above the declining yearly cycle trend line confirms a new intermediate cycle.

There is an alternative scenario on bonds that takes into account the mini triangle consolidation in the fall.

I am not going to say too much except that it would place the weekly cycle at week 13.
Right now I think the first scenario is the more likely scenario.

Getting back to the daily cycle, we mentioned that bonds closed up off the lows easing the parameters to forming a swing low.

It looks like stocks took notice

The daily equity cycle has a current peak on Friday, day 17.
Monday was day 18 and saw equities print a lower daily low.

We did note in the Weekend Report that equities were very stretched above the 10 MA.
So a break below 1494.82 forms a swing high and could signal a move into a half cycle low.

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