Cycle Trading

Stocks were down .67% on Monday and delivered a bearish crossover on the True Strength Indicator.

Our daily cycle count has become obscured. Monday was either day 19 or day 49 for the daily equity cycle. So it is not clear if Monday’s down day is a signal for the start of a daily cycle decline.

What is clear is that stocks are in a daily uptrend & will remain so unless they close below the lower daily cycle band. Another thing that is clear is the change of nature in stocks since the November cycle low.

Since the November cycle low stocks have not only remained in a daily uptrend, they also have held above the 10 day MA. Stocks also printed a cluster of BOW days that we discussed here.

And stocks delivered another strong 509 million BOW day again on Monday.

At this point we will look for a close below the 10 day MA to signal the daily cycle decline. And a close above the 10 day MA will indicate a continuation of the uptrend.