Cycle Trading

Stocks have been checking off the list of conditions that precede a daily cycle low.

Timing Band – Check
Swing Low – Check
Bullish divergence on the True Strength Indicator – Check
Large Buying on Weakness numbers – Check & Check

Stocks printed their lowest point on Thursday, day 67, placing stocks very deep in its timing band for a daily cycle low. The swing low on Friday has good odds of forming the daily cycle low. A break of the declining trend line will provide final confirmation that day 67 was the daily cycle low.

Bonds also appear to be waiting …

The daily bond cycle peaked on day 13. Then it formed a swing high and closed below the upper daily cycle band to signal the daily cycle decline. Bonds broke below the daily cycle trend line on day 16 to confirm the daily cycle decline. A break below the day 16 low of 128.91 will continue the daily cycle decline. A break above the day 16 high of 130.85 would signal an early daily cycle low has been set.