Cycle Trading

Congress proved the stimulus package Sunday night and Monday morning traders sold the news.

Stocks were down over 2.4% early in the day. Then stocks recovered much of the early loss into the close. Stocks are in a daily uptrend that has been characterized by highs forming above the upper daily cycle band and lows forming above the lower daily cycle band — and more recently lows forming above the upper daily cycle band. And these lows forming above the upper daily cycle band are starting to range from 79 – 90 points. Lows forming above the upper daily cycle band coupled with these brief corrections indicate that stocks are beginning a runaway move.