Stocks formed a swing high on Thursday.

Stocks closed above the 10 day MA on Tuesday and then higher again on Wednesday to signal day 72 as the DCL. However, as we discussed here, that the decline into the day 72 DCL caused the 10 day MA to decline sharply. So stocks may need to consolidate to allow the 10 day MA to flatten out before it can turn higher. It appears that stocks are beginning to find their footing on the lower timeframe.

Even through stocks closed lower for the day there is a new pattern of a higher high and higher low emerging on RSI 05. The 2 hour chart showed that stocks ran into resistance at the declining 50 MA and gapped down lower on Thursday. Stocks managed to rally off the daily low to close near the high of the day. Also notice the change in behavior on the 2 hour RSI 05. Prior to Thursday, RSI 05 was characterized by highs below the 70 line and lows below the 30 line. That is beginning to change with a new high above the 70 line and a new low above the 30 line. The next signal that we are watching for is for stocks to close above the 50 MA on the 2 hour chart as further confirmation that day 72 was the DCL.