Cycle Trading

Summary

• Daily: Potential extended cycle; swing low and close above the 10 day moving average and 50 day moving average would confirm 57 RT
• Weekly: Consolidation continues below major 7000 resistance
• Takeaway: 6800 defense weakens bearish momentum — confirmation above the moving averages would shift near-term control back to the bulls

Stocks were rejected at the 7000 level last week, forming a swing high and closing below both the 10 day moving average and the 50 day moving average. Although the month-plus consolidation has obscured precise daily cycle counts, the loss of both moving averages confirmed a continuation of the daily downtrend and triggered a cycle band sell signal.

On Tuesday, price broke below the prior day 50 low but failed to produce bearish follow-through. Instead, buyers stepped in at the 6800 level, driving a bullish reversal. The inability of bears to press the breakdown shifts the odds toward this being an extended daily cycle rather than the start of a new decline.

A swing low combined with a close back above the converging 10 day moving average and 50 day moving average would allow us to label Tuesday as the Daily Cycle Low — 57 RT, signaling a right-translated structure and improving the short-term outlook.

A move above 6866.99 will form the required swing low and set up the conditions for cycle confirmation.

Takeaway

Stocks remain capped below 7000, but the successful defense of 6800 suggests downside momentum is fading. A confirmed 57 RT would signal an extended cycle and return short-term control to the bulls.