Cycle Trading

Stocks found support at the 50 day MA on Thursday.

Thursday was day 40, placing stocks in their timing band for a DCL. Stocks found support at the rising 50 day MA and formed a bullish reversal, which eases the parameters for forming a swing low. A break above 4028.30 will form a swing low. Then a close above the declining 10 day MA will have us label day 40 as the DCL. Stocks should then break above the declining trend line and turn the 10 day MA higher as it rallies out of its DCL.

Please keep in mind that stocks closed below the lower daily cycle band on both Tuesday and Wednesday.  Closing below the lower daily cycle band ends the daily uptrend and begins a daily downtrend. Closing below the lower daily cycle band also indicates that the intermediate cycle decline has begun – which I plan to discuss further in the Weekend Report.