Cycle Trading

Stocks bounced off the 61 Fib level that we discussed on Monday.

Stocks formed a swing low on Tuesday to close back above the 200 day MA. We will use Tuesday’s swing low to construct the daily cycle trend line. A close above the 10 day MA will have us label day 15 as a half cycle low. We would need to see stocks close above the 50 day MA before we could have any confidence that a rally can be sustained. Stocks are currently in a daily downtrend and will remain so unless they close back above the upper daily cycle band.