Cycle Trading

Stocks formed a bullish reversal on Monday.

Monday was day 25, placing stocks in the early past of its timing band for a daily cycle low. Monday’s bullish reversal managed to close above the August low. A swing low will signal then new daily cycle. There is the risk that the 10 day MA will send stocks to form a lower low. We will use a close above the 10 day MA to label day 25 as the DCL. Long positions can be entered on a swing low using Monday’s low as the stop.