Cycle Trading

Stocks formed a daily swing high on Friday. On Monday stocks delivered bearish follow through.

Monday was day 21 for the daily equity cycle. While stocks may only be moving down into a half cycle low, I believe that stocks are declining into their daily cycle low for the following reasons:

1) Stocks closed below the 10 day MA
2) Stocks are in their the timing band for an intermediate cycle low.

Stocks closed below the 10 day MA on Monday. Closing below the 10 day MA generally signals the daily cycle decline.

This is week 25 for the intermediate equity cycle. 7 of the 10 previous intermediate cycles bottomed on or before week 24. The peak on day 18 does still favors a left translated daily cycle formation. A left translated daily cycle is needed to usher in the intermediate cycle decline.