Cycle Trading

Stocks delivered bullish follow through on Thursday to provide additional confirmation of the new daily cycle.

Steel confirmed a new daily cycle on Thursday

I want to start off by looking at the longer term picture for Steel. The longer term picture shows that 44 level was a support back in 2011. Steel then lost that support late 2011. That 44 resistance level turned into a multi year resistance level until late 2017.

Steel broke above the multi year resistance level late 2017. And now after rallying for several months steel appears to be backtesting that resistance-turned-support level.

On to the daily chart …

Steel printed its lowest point ahead of the general market last Wednesday. That was day 32, placing steel deep in its timing band for a daily cycle low. A swing low did form last Thursday to signal a new daily cycle. However a break above the declining trend line was needed to confirm the new daily cycle — which occurred today.

So after breaking out above a multi year resistance level steel appears to have successfully backtested the breakout and is still early in a new daily cycle.