Cycle Trading

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Tuesday was day 32 for the daily equity cycle. And stocks did form a swing low as we suspected.

At 32 days, equities are still early enough in their timing band for further downside. Having acknowledge that, if stocks break above the declining trend line that will mark a new daily cycle, which will be the 5th daily cycle for the current intermediate cycle

This kind of reminds me of the previous yearly cycle. Where this current weekly cycle began in November, the previous yearly cycle saw stocks begin to rally in October.

Notice how all of the daily cycle corrections ranged between 30 and 64 points.

One quick observation is that the 5th daily cycle followed a right translated cycle but did not print a higher high …

So we see that both intermediate cycles began late in the calendar year. The daily cycle correction ran between 30 & 64 points. Both extended into a fifth daily cycle.

A significant difference is that the 10/2011 – 6/2012 rally ended in a yearly cycle low.
This current rally is due for not only a yearly cycle decline, but a four year decline as well.

Now if you thought last summer’s 155 point (10.9%) drop was nasty …

A four year low will make that look like a pony ride …

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