Cycle Trading

Stocks dropped close to 6% on Thursday.

Stocks gapped below the 10 day MA and continued lower to close below the 200 day MA. This type of move 11 weeks into the intermediate cycle signals that stocks have begun their intermediate cycle decline.

>>>>>>>>>>>>>>>>>>>>>>> Enter the Fed <<<<<<<<<<<<<<<<<<<

I believe that the Fed could not let the markets delver any bearish follow though to Thursday’s huge drop. So stocks recovered the 200 MA on Friday. On Monday, even though stocks formed a lower low, they closed higher on the day — printing another bullish reversal. If stocks form a swing low, it would appear that the Fed managed to form a shortened, 21 day daily cycle low.