Cycle Trading

Stocks may have found support at the 50 day MA.

Monday was day 49, pacing stocks deep in their timing band for a DCL. Stocks have retraced past the 38 % fib level and formed a narrow range day on Monday just above the 50 day MA. Stocks still could go lower to break the daily cycle trend line. However, since August of 2014 over 75% of the daily cycles bottomed at or before day 49. Monday’s narrow range day eases the parameters for forming a daily swing low. And with possible support from the 50 day MA, if stocks form a swing low — that could mark the daily cycle low. A low risk entry can be taken on a swing low, using the 50 day MA as the stop.