Cycle Trading

Stocks printed and another higher high on Tuesday.

The decline into the week 23 low did not come as a result of a failed daily cycle. The decline only caused stocks to close below the 10 week MA for 1 week and did not even turn the 10 week MA lower. So there are several criteria for an ICL that has not been satisfied.

But I am not going to over-think this one. The week 23 low was the timing band for an ICL. In this environment of a new president just passing a truly massive stimulus package on top of the record amount of money printing that has been ongoing – this is probably all we will see for an intermediate cycle decline so we will label week 23 as the ICL.

On Saturday we observed that stocks were breaking out to new highs.

On Tuesday we can see that the breakout continues. Unless stocks close back below the ‘Line in the Sand’, I will continue with the assumption that stocks are now advancing into a new intermediate cycle.