Cycle Trading

Stocks formed a swing high on Thursday then delivered bearish follow through on Friday.

Friday was day 27, placing stocks in their timing band for a DCL. Stocks closed below the 10 day MA on Friday and managed to turn it lower. However, stocks also found support at the 50 day MA on Friday.  

Stocks have satisfied the criteria for a DCL.

• Timing band (early)
• Stocks closed below the 10 day MA, turning it lower.
• Trend line break
• 38 % Fib retracement

Potentially, the 50 day MA could provide support for a DCL to form.   A possible scenario would be a marginal break below the 50 day MA on Monday with a swing low forming the following day. But if stocks deliver bearish follow through, we could see a 3 – 7 day bloodbath phase. Stocks are still in a daily uptrend. They will remain in their daily uptrend unless they close below the lower daily cycle band.

In the Weekend Report I breakdown the longer term outlook regarding the yearly cycle decline.