Cycle Trading

Stocks printed their lowest point on week 38.
In real time it looked like stocks printed their intermediate cycle low.
Then on Monday – Stocks broke below the week 38 low.

It appears that stocks are taking a step backwards so they can take 2 steps forward.

In the Weekend Report we discussed how stocks have not yet confirmed that week 38 was the intermediate cycle low. Therefore, stocks breaking below the week 38 low extends the intermediate cycle decline. It has been 6 weeks since stocks printed the week 38 low. If stocks did not undercut that low, then 6 weeks would have been lost to volatility. But since this extends the intermediate cycle — once the daily cycle low forms, it will signal a new intermediate cycle. Which would give stocks a fresh set of weeks for their intermediate cycle advance.