Cycle Trading

Stocks formed a bullish reversal on Thursday.

Stocks became stretched above the 10 day MA last Friday.   While stocks formed a swing high on Thursday, they also found support at the rising 10 day MA and formed a bullish reversal. The status of the daily cycle is not clear since the 10 day MA did not turn lower as stocks printed the day 35 low. If stocks deliver bearish follow through and close below the 10 day MA that will signal a continuation of the daily cycle decline — making Thursday day 42. What is clear is that stocks are currently in a daily uptrend. If stocks form a swing low above the upper daily cycle band that will indicate a continuation of its daily uptrend and signal a cycle band buy signal — in which we would label day 35 as the DCL.  A break above 4422.62 will form a daily swing low.