Cycle Trading

Monday stocks delivered follow through Friday’s bullish reversal.

Monday was day 15 for the daily equity cycle. Stocks formed a swing low and regained the 10 day MA to signal that stocks have formed a half cycle low. A close above the 50 day MA will confirm the half cycle low. And a close back above the upper daily cycle band will resume the daily uptrend.

So while stocks appeared to have formed their half cycle low other sectors continue to show their leadership

The Nasdaq held above the 50 day MA on Friday. On Monday, the Nasdaq closed back above the upper daily cycle band to resume its daily uptrend.

The Semi’s also closed back above the upper daily cycle band to resume their daily uptrend. And they are closing in on its all time highs.

And with these 2 sectors providing leadership, the rest of the market is bound to follow.