Cycle Trading

Oil formed a daily swing low on Tuesday.

Oil printed its lowest point on Monday, day 38 peak, placing oil in its timing band for a daily cycle low. The peak on day 11 locks in a left translated daily cycle formation which has us expecting oil to break below the previous daily cycle low of 63.40 in order to form a failed daily cycle.

But since oil is in its timing band for a DCL, Tuesday’s swing low could trigger a new daily cycle. The TSI bullish divergence suggests that a cycle low is at hand. If oil can recover the 10 day MA and then close above the declining trend line it would confirm the new daily cycle.