Cycle Trading

Stocks became stretched above the 10 day MA on Monday. They have since been consolidating which is helping to allow the 10 day MA catch up to price.

While stocks are at all-time highs, there are bearish divergences developing on the oscillators, which often herald a cycle decline. If stocks form a swing high and close back below the breakout level that will signal the daily cycle decline. And if this breakout fails I think that will also trigger the intermediate and yearly cycle declines, which I plan to further discuss in the Weekend Report.