Cycle Trading

Stocks formed a swing low on Friday and delivered bullish follow through on Monday.

Stocks printed their lowest point on Thursday, day 41, placing them in their timing band for a daily cycle low.  Friday’s swing low signals the new daily cycle. While stocks rallied on Monday, they were unable to close above the 10 day MA. Normally, we need to see a close above the 10 day MA in order to label day 41 as the DCL — but today, I’m calling it based on the NYSE.

The NYSE formed a swing low on Friday and also closed above the 200 day MA. On Monday it delivered bullish follow through by closing convincingly above the 10 day MA to signal Thursday as the DCL.