Cycle Trading

(My apologies to Mick & Keith)

S

Monday was day 6 for the daily equity cycle and stocks broke above the upper megaphone trend line, which we discussed here. But then they formed a bearish reversal and closed below the upper trend line, where they have begun to consolidate along the neckline support which will allow the 10 day MA to catch up to price. A close below the neckline support would set stocks up for a left translated daily cycle formation. However, we are waiting on a close back above the upper trend line to signal that stocks are continuing the advancing phase for their intermediate cycle