Cycle Trading

Oil broke out to a new daily cycle high on Monday.

Oil had been consolidating in a trading box for the past 2 weeks. Oil broke bullishly out of the consolidation on Monday. The new high on day 30 locks in a right translated daily cycle formation. However, there are bearish divergences that are beginning to develop on the oscillators, which often herald the daily cycle decline. With Monday being day 30, that places oil in its timing band for a DCL. A swing high and break of the accelerated (black dashed) trend line will signal the daily cycle decline. Then oil should break below the blue daily cycle trend line in order to print its daily cycle low. For now, oil remains firmly in its daily uptrend. It will maintain its daily uptrend unless it closes below the lower daily cycle band.