Cycle Trading

Stocks broke below the 10 day MA early on Thursday.

Stocks did manage to recover at the end of the day to close back above the 10 day MA. Stocks have been on a strong uptrend where breaks below the 10 day MA are quickly recovered. Even the decline into the recent DCL only lasted 3 days.

As we discussed on Monday, stocks are 21 weeks into their intermediate cycle so we need to be watchful for signs of a left translated daily cycle formation that could lead to an intermediate cycle decline. If stocks deliver bearish follow through and close below the 3885 support level then the odds will begin to shift to a left translated daily cycle formation.

However, stocks are in a daily uptrend, if they form a swing low here they will remain in their daily uptrend and trigger a cycle band buy signal.