Cycle Trading

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

Monday was day 24 for the daily equity cycle. A new high on day 24 assures us of a right translated daily cycle formation.

We need to recognize that there are bearish divergences developing on the oscillators. Resistance at the 200 day MA is a likely place to send stocks into their daily cycle decline. We will need to watch for a swing high accompanied by a trend line break to indicate that stocks have begun their daily cycle decline. But since the daily cycle is right translated, that gives us the expectation that stocks will form higher highs and higher lows. Which aligns with stocks starting to close above the upper daily cycle band, establishing a new daily uptrend. They will remain in their daily uptrend unless they close below the lower daily cycle band.