Cycle Trading

Stocks ended the week by closing above the 10 day MA. Stocks printed their lowest point on day 33, placing them in their timing band for a DCL. But the lack of bullish follow through calls into question if day 33 was the DCL.  Any bearish follow through with a close below the 10 day MA would indicate a continuation of the daily cycle decline.  However, stocks are currently in a daily uptrend.  A close above the 6000 resistance level will indicate a continuation of the daily uptrend and signal a cycle band buy signal — in which we would then label day 33 as the DCL.  One stock which could pull the market higher or drag it lower is Nvidia.

Nvidia’s last recognizable DCL was April 21st. Nvidia formed a swing high and is sitting right on the 135 support level. A break below the 135 support with a close below the 10 day MA would signal its daily cycle decline which would likely drag the market along with it.