Cycle Trading

Stocks printed their lowest point on Monday, day 34. That places stocks in their timing band to print a daily cycle low. We still need a break above Monday’s high of 1965.15 to form a swing low. But with stocks being up almost 4 % today, a daily cycle low may have just been left behind. And I think that once a new daily cycle is confirmed,it will also signal a new intermediate cycle.

What bothers me about labeling week 38 as a right translated intermediate cycle low is that stocks never broke out to a higher high. I think that the intermediate cycle continued to stretch, making this — week 45. The earlist a weekly swing low can form will be next week. But I believe that a weekly swing low forms, it will signal a new intermediate cycle.

And the next chart helps support this scenario.

Stocks making new 52 week lows has spiked this week. It has spike to a level that has occurred only a handful of times over the past 10 years. And each one of those times signaled a new intermediate cycle …