Cycle Trading

Stocks essentially have done enough for a DCL to form

Stocks formed a swing high and closed below the 10 day MA on Wednesday. Thursday saw stocks break below the daily cycle trend line and turn the 10 day MA lower. Stocks also retraced past the 38% Fibonacci level. Thursday was day 27, placing stocks in the early part of its timing band for a daily cycle low. What stocks need is a level of support to form a swing low.

The 60 minute chart shows that stocks may have found possible support.

The 200 MA on the 60 minute chart has, in the past, provided support for a DCL to form. Stocks are currently in a daily uptrend. If stocks form a swing low above the lower daily cycle band and close back above the 10 day MA — that will indicate a continuation of the daily uptrend and signal a cycle band buy signal. We would then label day 27 as the DCL.