Cycle Trading

Stocks broke lower on Tuesday.

Tuesday was day 35, placing stocks in their timing band for a daily cycle low. The peak on day 22 indicates a right translated daily cycle formation, giving us the expectation that a higher low will be formed once stocks print their DCL.

However stocks closed below the lower daily cycle band on Tuesday. Closing below the lower daily cycle band ends the daily uptrend and begins a daily downtrend. Closing below the lower daily cycle band also signals that stocks have begun their intermediate cycle decline. Which means that once stocks form their DCL, the new daily cycle should left translate and fail in order for stocks to complete their intermediate cycle decline.