Stocks have been consolidating in a narrow range for over the past 2 weeks since emerging from the day 23 low. On Tuesday stocks broke bearishly out of consolidation.
Tuesday was day 17 for the daily equity cycle. Stocks had been closing above the upper daily cycle band prior to Tuesday which indicates that stocks are in a daily uptrend. So while stocks did break lower, stocks printed a bullish tail above the 50 day MA potentially setting up a half cycle low. Forming a swing low above the lower daily cycle band would indicate that stocks remain in their daily uptrend. Then a close back above the 10 day MA would confirm that day 17 hosted a half cycle low.
What we need to watch for if stocks do not form a swing low but instead closes below the lower daily cycle band. That not only would confirm that stocks are in a daily cycle decline. It would also signal that the intermediate cycle is in decline as well.
Cycle Trading 
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