Cycle Trading

Stocks closed above the 6750 level on Wednesday. While stocks broke out to a new high on Thursday, that was reversed and stocks closed lower on the day — closing below the 6750 level.  Stocks delivered bearish follow through on Friday.  Stocks formed a swing high on Friday and closed below the 10 day MA to signal the daily cycle decline.  Friday was day 28, placing stocks in their timing band for a daily cycle low. We will be watching the 50 day MA for possible support for the DCL to form.  Stocks closed below the. lower daily cycle band on Friday. Closing below the lower daily cycle band ends the daily uptrend and begins a daily downtrend.  Closing below the lower daily cycle band also signals that the intermediate cycle decline has begun.  If the 50 day MA does not hold then it is possible to see stocks break below the previous DCL. A break below 6360.58 will form a failed daily cycle.