Cycle Trading

There is a bullish divergence forming on the McClellan Oscillator.

The NYMO has reached a level that has seen stocks form daily cycle lows. While stocks have formed a lower low, the McClellan Oscillator has formed a higher low. With stocks late in their timing band for a daily cycle low, the bullish divergence on the McClellan Oscillator indicates that stocks have formed a daily cycle low.

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Stocks did form a daily swing low on Thursday. Stocks printed their lowest point on Wednesday, day 56, placing stocks late in their timing band for a daily cycle low. There are bullish divergences developing on the oscillators which often accompany a cycle low. A recovery of the breakdown from the 45 day low would have us label day 56 as the DCL.