Cycle Trading

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The daily equity cycle peaked on day 19 and then declined. It printed its lowest point on day 26 before forming a swing low. Today saw stocks break out to new highs.

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The normal timing band for a daily cycle low runs from day 30 through day 45. However the breakout to new highs has me thinking that a 26 day daily cycle low may have left behind.

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Stocks have printed sub-30 day daily cycle lows in the past as evidenced above. The above chart shows a 28 day daily cycle low formed in September of 2012 and December of 2012 saw stocks leave behind a 29 day daily cycle low.

Bonds appear to be ready to print a daily cycle low.

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Bonds formed a lower low on day 19. Bonds are in the timing band to form a daily cycle low. A swing low and trend line break will signal a new daily cycle. With the weekly count at week 11, we should see another failed daily cycle following once a daily cycle low forms.