Cycle Trading

Stocks closed below the 10 day MA on Friday to signal the daily cycle decline. Stocks went on to deliver more bearish follow through on Monday.

Monday was day 44, placing stocks deep their timing band for a daily cycle low.  Stocks are on day 2 of their bloodbath phase, which could last 5 to 7 days. Stocks will still need to turn the 10 day MA lower before the DCL can form. Stocks should then go on to break below the (blue) daily cycle trend line as they seek out their DCL. However, we could see the 50 day MA provide support for the DCL to form, which happens to be about the 50% Fib level.  Stocks are currently in a daily uptrend.  They will remain in their daly uptrend unless they close back below the lower daily cycle band.