Cycle Trading

Energy emerged from its yearly cycle low and rallied close to 13% before peaking on day 35. Then it formed a swing high and drifted lower until printing its lowest point on Friday. That was day 48 placing energy very late in its timing band for a daily cycle low.

XLE formed a swing low on Monday and managed to close above the 10 day MA to signal a new daily cycle. XLE then delivered more bullish follow through on Tuesday. A break above the declining trend line will confirm the new daily cycle. Since XLE managed to not close below the lower daily cycle band as it formed its DCL it remains in its daily uptrend. XLE will continue in its uptrend until it closes below the lower daily cycle band.