Cycle Trading

PRE-SUMMARY

Stocks formed a swing high on day 29 as they entered their timing band for a DCL. Confirmation will still be needed before signaling the daily cycle decline.

Stocks formed a swing high on Tuesday. Tuesday also marked day 29 for the current daily cycle, placing stocks in their timing band for a DCL.From a cycle perspective, timing bands alone do not confirm a daily cycle decline. A close below the 10 day moving average would still be needed to signal that the daily cycle decline is underway. Stocks should then go on to turn the 10 day moving average lower as they seek out their DCL.

What is clear is that stocks remain in a daily uptrend. Stocks will remain in their daily uptrend unless they close below the lower daily cycle band.However, the swing high forming within the timing band suggests the market may be beginning the process of transitioning from expansion into consolidation or decline. If stocks close below the 10 day moving average, then it would indicate the daily cycle decline has begun while keeping the larger daily uptrend intact unless the lower cycle band breaks.

Cycle Alignment:

Bullish