Cycle Trading

After backtesting the 10 day MA on Monday, stocks delivered bearish follow through on Tuesday.

Stocks formed a bearish engulfing candle on Tuesday, causing them to close lower. This signals the daily cycle decline, which can last from 5 to 7 days. Stocks should also break below the daily cycle trend line before completing its daily cycle decline. The peak on day 32 assures us of a right translated daily cycle formation which should result in stocks printing a higher daily cycle low. But what I see developing on the weekly chart indicates that stocks are poised for a larger degree intermediate cycle decline, which I plan to discuss in the Weekend Report.