Cycle Trading

Summary

• Stocks have confirmed the daily cycle decline.
• The daily uptrend has ended; a daily downtrend is now in place.
• A break below the lower daily cycle band signals the start of the intermediate (weekly) cycle decline.
• Focus now shifts to 6700 as potential support for the DCL.

Stocks closed below the 10 day moving average on Friday and delivered bearish follow-through on Tuesday after President Trump escalated trade tensions with Europe over Greenland, including threats of higher tariffs on imports.

On Tuesday, stocks gapped lower and closed below the 50 day moving average, confirming the daily cycle decline. Tuesday marked day 38, placing stocks firmly inside their timing band for a DCL.

Stocks also closed below the lower daily cycle band. This action ends the daily uptrend and confirms the start of a daily downtrend. Importantly, a close below the lower daily cycle band also signals that the intermediate (weekly) cycle decline has begun.

Attention now turns to the 6700 level, which will be closely monitored as potential support for the daily cycle low to form.