Cycle Trading

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The daily equity cycle peaked on day 9, formed a swing high on day 10 and then preceded to sell off for 4 straight days. Wednesday saw stocks recover a bit.

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Losing the 50 day MA was significant. Losing the 50 day MA is not a requirement for a a daily cycle decline. But I am not sure if I have seen where the 50 MA was lost and then the cycle recovered. It is likely that day 9 will remain as the cycle peak. And if the daily cycle has peaked then any counter-trend rally will likely be contained by the 10 day MA

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The weekly chart hosts a weekly swing high and a weekly cycle trend line break. While stocks have rebound somewhat, there is still a bearish divergence on the weekly True Strength Indicator. And the weekly TSI is very close to delivering a bearish zero line crossover, which is an excellent indicator that the intermediate cycle is in decline.