Cycle Trading

Typically stocks print 2 – 3 weekly cycles during the course of their yearly cycle.

Stocks are currently in their third weekly cycle for the year. Stocks are also in their timing band for seeking out a yearly cycle low. Therefore we remain alert to signs of a left translated daily cycle formation that would signal the beginning of the yearly cycle decline.

The current daily cycle peaked on day 4. Then stocks formed a swing and breached the daily cycle trend line on day 12 to signal start of the daily cycle decline. Stocks then delivered bearish follow on Monday through by closing below the daily cycle trend to signal the start of the daily cycle decline.

However, Tuesday’s close above the declining trend line changes all of that.

Stocks broke out above the declining trend line on Tuesday. The swing low and break out to a new high will require us to label day 14 as a half cycle low. And the new high on day 14 begins to shift the likelihood for the current daily cycle to form as a right translated daily cycle. Which will delay the impending intermediate cycle decline.