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Cycle Trading

Testing the Line

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The daily equity cycle peaked on day 8. Then proceeded to lose both the 10 day MA and the 50 day MA. It reversed higher on day 13. Then on day 16 stocks broke lower, losing the 50 day MA once again and formed the declining cycle trend line.

spx

Stocks printed its lowest point of the daily cycle on day 21 before bouncing higher. Wednesday is day 23 for the daily equity cycle and stocks managed to rally enough to tag the declining cycle trend line. Stocks are still below the 50 day MA and also printed a huge 902 million SOS today.

Since stocks are still 7 days shy of their timing band for a daily cycle low the odds are likely that we will see a reversal and a continuation of the daily cycle decline. A break below 1972.56 forms a failed daily cycle.

3 responses to “Testing the Line”

  1. Canice O'Regan Avatar
    Canice O’Regan

    Hi,
    Two questions please
    1. You say TSI is trending lower but I could argue that it has broken the TL that connected the Dec and early Jan highs, also the signal line has crossed up. What weight do you give to these developments?
    2. How would you interpret the chart cycle wise if the TL is breached?

    Reply
  2. likesmoneystudies Avatar
    likesmoneystudies

    A bullish trend line break is, of course a bullish signal. I would place more weight of a trend line break that also broke above the zero line.

    Reply
    1. Canice O'Regan Avatar
      Canice O’Regan

      Thanks. As time moves on we have seen the ECB announcement, does not seem to have had much effect on SPX which looks set to open with a TL break.

      I would also be interested, for my education, in your answer on the TSI points.

      Reply

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