Cycle Trading

Stocks closed at all time highs on Tuesday.

Tuesday as day 36 for the daily equity cycle. With stocks in their timing band for a daily cycle decline and closing at all time highs we need to be on alert for a possible trigger event to send stocks to seek out their daily cycle low. The event could be the Wednesday’s FOMC meeting.

This is week 18 for the intermediate equity cycle. Setting aside the previous ICL, the prior 6 intermediate cycles all ran 24 weeks or less. So at 18 weeks, stocks are in their timing band for an intermediate cycle decline.

The Fed will release their minutes on Wednesday. With stocks at all time highs and in their timing band for both a daily cycle decline and a weekly cycle decline, we need to be alert to a potential sell-the-news reaction to the Fed minutes on Wednesday.