Cycle Trading

Summary

• Stocks were rejected at the 7000 resistance level on Tuesday
• Price retraced to the 50 day moving average, where support held
• Despite the bounce, stocks closed below the 10 day moving average
• The daily uptrend remains intact but unconfirmed
• A confirmed swing low followed by a close above 7000 would signal trend continuation
• A close below the 50 day moving average would raise risk of a left-translated daily cycle

Stocks continue to run into resistance at the 7000 level. Tuesday’s attempt higher was rejected, triggering a pullback toward the rising 50 day moving average. That level acted as support, allowing stocks to reverse intraday, but the session still ended with a close below the 10 day moving average.

From a trend perspective, stocks remain in a daily uptrend. However, confirmation is still lacking. A continuation signal requires a confirmed swing low and a decisive close above the 7000 resistance level, which would also trigger a cycle band buy signal.

Failure to regain the 10 day moving average and reclaim 7000 keeps the market vulnerable in the near term. If bearish follow-through develops and price closes below the 50 day moving average, the structure would shift toward a left-translated daily cycle—suggesting the current advance is aging and downside risk is increasing.

For now, the market remains balanced between support and resistance, with confirmation still required in either direction.

Takeaway

Stocks remain in a daily uptrend, but until a swing low is confirmed and price closes above 7000, the advance lacks confirmation. Holding the 50 day moving average keeps the bullish case alive, while a breakdown below it would materially weaken the daily cycle structure.