Cycle Trading

Stocks broke below the 50 day MA on Friday.

Stocks printed their lowest point on Friday, day 41, placing them deep in their timing band for a DCL. Stocks formed a bullish reversal off support from the 200 day MA on Friday. This eases the parameters for forming a daily swing low. A swing low and close back above the 50 day MA will signal a new daily cycle.

There are two things to keep in mind once stocks begin their new daily cycle

1. Stocks closed below the lower daily cycle band as they were seeking out their DCL.  Closing below the lower daily cycle band is an indication that the intermediate cycle decline has begun.
2. Stocks are currently on week 19 for the current intermediate cycle.  Which shifts the odds towards the new daily cycle left translating in order to usher in the pending intermediate cycle low.  

However, if support from the 200 day MA fails then there is a real possibility to see stocks continue lower to break below their previous DCL of 3764.49 to form a failed daily cycle.