Cycle Trading

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Stocks printed a new daily cycle high on Friday, day 15. Monday a swing high formed with more bearish follow through on Tuesday.

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The bearish follow through today tagged the daily cycle trend line. A day 15 peak holds open the door to this daily cycle forming in a left translated fashion, which could lead to a failed daily cycle and an intermediate cycle decline.

While there are signals like the True Strength Indicator that indicate the daily cycle decline has begun, we would like to see a break of the daily cycle trend line would confirm the daily cycle decline.

If stocks do break below their daily cycle trend line confirming a daily cycle decline, at day 17 that leaves from 13 to 25 days for the timing band for a daily cycle low.

So while we wait on the board market to deliver a trend line break other areas already have.

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The NASDAQ was down 1.35% today and they pierced their daily cycle trend line, which signals the daily cycle decline has begun.

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The Transports pierced their daily cycle trend line today as well.

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We see that one of the market leading sectors, Biotech, printed a clear and convincing trend line break confirming a daily cycle decline.

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And the Russell also broke below its daily cycle trend line in a clear and convincing fashion confirming its daily cycle decline.