Cycle Trading

The initial surge out of the day 26 DCL saw stocks get stretched above the 10 day MA. Stocks had been consolidating above the 50 day MA — until Wednesday

Bear Case — The Fed raising rates by .75% caused stocks to drop 2.5% on Wednesday and then another 1.06% on Thursday. Closing convincingly below the converging 50 day MA and 10 day MA indicates something sinister if afoot.  A close below the lower daily cycle band will end the daily uptrend and begin a daily downtrend.

Bull Case — Despite dropping 3.56 % on Wednesday and Thursday, stocks are still in a daily uptrend. If stocks form a swing low above the lower daily cycle band then they will remain in a daily uptrend and signal a cycle band buy signal. A break above 3750.59 will form a daily swing low.