Cycle Trading

Stocks dropped over 3% on Monday, continuing the volatility we have seen since early October.

I believe that stocks printed an intermediate cycle low on 10/29/18. With stocks closing above both the 50 day MA and the 200 day MA on Friday, it appeared as if stocks printed an early daily cycle low on 11/23/18. But Monday’s drop has obscured our daily cycle count.

So let’s turn to the weekly chart.

Stocks did break above the declining weekly trend line confirming that week 38 hosted the ICL. So unless stocks break below the ICL of 2603.54, I would maintain that this is volatility associated a difficult bottoming process.