Cycle Trading

Stocks formed a swing low on Monday.

Stocks printed their lowest point on day 60 placing them deep in their timing band for a DCL. Only 3 times in the past 7 years did the daily cycle stretch past 60 days. Stocks also closed above the 10 day MA on Monday which increases the odds that day 60 was the DCL. A break above the declining accelerated (dashed) trend line will have us label day 60 as the DCL.

Once stocks break above the declining accelerated trend line the next task at hand would be to break above the lower stem of the megaphone topping pattern. Stocks will need to do so in order for any bullish trending move to develop. Rejection here would extend the intermediate cycle decline.