Cycle Trading

Stocks broke below the previous intermediate low during week 21 forming a failed intermediate cycle.

Since the bounce out of week 21 was not enough to confirm a new intermediate cycle, the intermediate decline extended to week 24. Stocks went on last week to form a weekly swing low and close above the lower weekly cycle band signaling that the intermediate cycle low has been set.

From a daily cycle perspective we see the low on day 43. Stocks continued in its down trend printing a lower low on day 60, extending the daily cycle decline.

Stocks rallied out of the day 60 low but formed a swing high today at the convergence of the 50 day MA and the 1950 resistance level. That could send stocks lower and backfill the gap at 1950. As long as stocks remain above the recent daily cycle low of 1810.10 then this is just noise. If stocks break below the previous low of 1810.10 then that forms a failed daily cycle.