Cycle Trading

Stocks formed a lower low on Monday. Stocks printed their lowest point on day 41, placing them in their timing band for a daily cycle low. Stocks closed above the 200 day moving average last week so we labeled day 41 as the daily cycle low. So — breaking below the day 41 low signals a failed daily cycle. However, stocks formed a bullish reversal on Monday. Monday’s bullish reversal, along with the bullish divergence on the oscillators, indicate a stretched daily cycle which would make Monday day 53. A swing low and close above the 10 day MA will have us label day 53 as the DCL. A break above 5627.56 will form a swing low.