The 8/11/16 Morning Report

August 11, 2016

The daily equity cycle peaked on day 31. Then it formed a swing high on Wednesday to signal the daily cycle decline.

While stocks did break below the daily cycle trend line on Wednesday, more bearish follow through is needed to confirm the daily cycle decline. A close below the 10 day MA would provide such assurance.

However, stocks are in a daily uptrend. Stocks will remain in an uptrend unless they close below the lower daily cycle band.

Biotech did provide bearish follow through on Wednesday.

IBB formed a daily swing high on Monday. It delivered bearish follow through on Wednesday by breaking below the daily cycle trend line in a clear and convincing manner to confirm its daily cycle decline. Like stocks, IBB is in a daily uptrend. It will remain in a daily uptrend unless it closes below the lower daily cycle band.

3 responses to “The 8/11/16 Morning Report”

Enrico Palazzo

August 12, 2016

SPX printed a new high after a swing high. What’s your explanation? Is it common?

Reply
1. likesmoneystudies
  
  August 12, 2016
  
  It can happen, especially if the asset is in a daily uptrend. That is why we need to see a break of the daily cycle trend line to confirm the daily cycle decline.
  
  Reply
  1. Enrico Palazzo
    
    August 12, 2016
    
    Yes, but a trendline was broken, because candle closed below the trendline. Seems it is going to start it’s decline today, we’ll see. Thanks for your reply.

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