Equites rebounded some today. They printed a higher low but fell short of forming a swing low.
Monday was day 39 for the daily equity cycle. It was also the lowest point since the daily cycle peaked on day 28. Stocks can still go lower. However, a break above 1659.18 forms a swing low off of Monday’s candle. Then a break above the declining cycle trend line confirms a new daily cycle.
Looking at the weekly cycle we can see that equities are currently in week 8 of the intermediate equity cycle. Once a new daily cycle begins, this will likely set the intermediate cycle trend line.
This is the third intermediate cycle of the year. The last weekly cycle ran long at 32 weeks. Often times we see cycles balance out a stretched cycle with a shortened cycle. So it is quite possible to see this intermediate cycle be in the range of 15 – 18 weeks.
If a new daily cycle begins in the next few days and runs 35 – 40 days, that would take the intermediate cycle out to about week 16. If the intermediate cycle were to balance out the cycles by printing a shorter cycle, then I would expect that this daily cycle to be the terminal daily cycle to the intermediate cycle and form as a left translated, failed daily cycle.
I was surprised to see some mild Selling on Strength on the SPY and a lager number on the IVV ETF. I would not expect to see any kind of SOS on the first day of a new daily cycle unless this is a signal in the teal leaves that the Big Boys are going to sell into strength.
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