Cycle Trading

Stocks formed a swing high on Thursday.

Thursday’s swing high makes it unclear if day 45 hosted a daily cycle low or if this day 56 of an extended daily cycle.

The Russell and the Transports are still seeking their DCLS in their respective extended daily cycles. A case can be made based on the the Russell and Transports that the general market still needs to deliver a clear and convincing decline into a daily cycle low.

However …

The Nasdaq 100 shows that the decline in late October:
* Closed below the 10 day MA
* Closed below the upper daily cycle band
* Turned the 10 day MA lower

All of which makes a strong case that the NDX is now on day 11 of the new daily cycle. So A case can be made that stocks are, like the NDX 100, on day 11 of its new daily cycle.

We need to keep in mind that stocks are in a daily uptrend and will remain in its uptrend until it closes below the lower daily cycle band. So unless stocks deliver a clear and convincing decline into a daily cycle low I believe that we need to proceed with day 45 as being labeled the DCL.

What would change that view would be if RSI breaks below the dashed blue line, stocks close below the upper daily cycle band, and deliver a bearish TSI Zero Line Crossover, then that would indicate that Thurs was day 56 of an extended cycle and that stocks are declining into an extended daily cycle low.