Stocks formed a daily swing high on Wednesday.
Stocks ran into resistance at the 200 day MA on Tuesday. Wednesday was day 41, placing stocks deep in their timing band for a daily cycle decline. Any bearish follow through will signal the daily cycle decline. And once the daily cycle decline begins, stocks will need to turn the 10 day MA lower before the DCL can form. Stocks should break below the daily cycle trend line as it seeks out is DCL.
Check out the similarities between 1982 August rally. That was fed induced correction as well and the rally was epic to new highs. Based on that roadmap we blew past 200 day b4 any real correction happened! Food for thought
Spidey,
You bring up a good point. So I looked at the chart from 1982. The ICL formed on Aug 9th. Stocks broke though the 200 day MA on Aug 23rd, just 10 trading days earlier. That was early in the daily cycle. What is different is that Wednesday was day 41, which is getting late in the daily cycle. So, it is doubtful that stocks will breakout here. Even if stocks do manage to break above the 200 day MA, breakouts that occur this late in the daily cycle are almost always given back.
LM
Ah! I didn’t think to factor that it was only day 10. Cool thanks for the reply!
Cycle Trading 
Leave a reply to likesmoneystudies Cancel reply