Cycle Trading

Stocks formed a swing low on Friday.

Stocks became a bit stretched above the 10 day MA on Tuesday, day 11. Stocks drifted lower into Thursday, forming a bullish reversal off of the 10 day MA. While stocks closed lower on Friday, they did form a swing low. We will use Friday’s swing low to construct the daily cycle trend line. Stocks are in a daily uptrend. If they deliver bullish follow through then they remain in their daily uptrend and trigger a cycle band buy signal. 

While stocks did close lower on Friday, keeping alive the possibility of a left translated daily cycle formation, the sectors below closed bullishly on Friday.

The market leading semi conductors formed a convincing swing low on Friday, gaining 2.41% on the day.

The transports closed at new all time highs.

And the banks closed at new all time highs.

That leads me to believe that the S&P will soon follow.