Cycle Trading

Stocks formed a swing high on Friday then closed below the 10 day MA on Monday to signal their daily cycle decline.

Monday was day 43, placing stocks late in their timing band for a DCL to form. 

Typically, stocks should turn the 10 day MA lower and retrace to at least the 38% Fib level in order to complete their DCL. This could see stocks retrace to the 50 day MA. 

Another thing that could trigger the DCL is the dollar. The dollar rallying into a new daily cycle has helped to send stocks into their daily cycle decline. The dollar is approaching the converging 50 day MA and 200 day MA and we are getting a jobs report on Friday. A possible scenario could be the jobs number causes the dollar to be rejected here, which could then mark the DCL for stocks.