Close, But No Cigar

April 2, 2018

On Saturday we made the determination that stocks are still declining into their intermediate cycle low so therefore stocks should break below the previous daily cycle low.

On Monday stocks came close but no cigar …

Stocks broke lower on Monday printing coming within 22 points from breaking below the previous DCL. I still believe that stocks need to break below the February low in order to complete their intermediate cycle decline. Bullish divergences are developing on the oscillators which usually accompany a cycle low. Monday was day 34 for the daily equity cycle, placing stocks in their timing band to print their DCL. So we will be looking for a swing low and a close above the declining 10 day MA to signal the new daily cycle.

2 responses to “Close, But No Cigar”

Jabalong

April 2, 2018

“I still believe that stocks need to break below the February low in order to complete their intermediate cycle decline. (…) So we will be looking for a swing low and a close above the declining 10 day MA to signal the new daily cycle.”

I’m a little unclear, are these mutually exclusive scenarios? Does a confirmation of a swing low and new daily cycle discount the possibility of a break below the Feb low? Or are you still looking for that to happen even if we get confirmation of a new daily cycle?

Reply
1. likesmoneystudies
  
  April 3, 2018
  
  The current daily cycle favors a right translated cycle formation.
  Confirmation of a new daily cycle prior to breaking below the Feb low would begin a new pattern of higher lows.
  If a DCL prints above the Feb low then the diminishes the possibility of breaking below that low.
  
  I believe that Stocks are still in their process of completing their intermediate cycle decline. That is why I am looking to stocks to break below the Feb low. However, the Fed could intervene. I would use a swing low and close above the 10 day MA as a signal to go long.
  
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