Cycle Trading

Summary

• Stocks reclaimed the 10 day MA, confirming day 16 as a half cycle low
• Bullish follow-through pushed prices to a new all-time high
• New highs confirm a right translated daily cycle structure
• Daily uptrend remains firmly intact with a cycle band buy signal in place

Stocks closed back above the 10 day MA on Friday, confirming day 16 as a half cycle low. That move was followed by strong bullish follow-through on both Monday and Tuesday, signaling improving momentum early in the back half of the daily cycle.

Tuesday’s breakout to a new all-time high is technically important. A new high occurring on day 20 confirms a right translated daily cycle, which aligns with stocks being firmly in a daily uptrend. This type of cycle behavior is exactly what we expect to see when trend strength is healthy and sustained. Breaking out to a new all-time high also signals a cycle band buy signal, reinforcing that the daily uptrend remains intact and in control. As long as stocks continue to hold above key short-term moving averages, the path of least resistance remains higher.