Cycle Trading

On Monday we discussed how stocks needed to break below their previous daily cycle low of 2532.69 in order to complete their intermediate cycle decline. And that by closing below the 200 day MA signaled that stocks were continuing their intermediate cycle decline.

Stocks reversed on Tuesday and regained the 200 day MA.

Regaining the 200 day MA places stocks in a squeeze play between the 200 day MA and the declining 10 day MA. If stocks form a swing low and close above the 10 day MA then will need to label day 34 as the DCL.

Bonds appear to have begun their daily cycle decline.

Tuesday was day 28 for the daily bond cycle. That places bonds in their timing band to seek out a daily cycle low. Therefore Tuesday’s swing high has good odds of marking the daily cycle top. A close below the 10 day MA will signal that the daily cycle is in decline. Then bonds should break below the daily cycle trend line in order to complete its daily cycle decline. Bonds have been closing above the upper daily cycle band signaling that they are in a daily uptrend. If bonds form a swing low above the lower daily cycle band then they will remain in their daily uptrend.