Cycle Trading

Pre-Summary

Stocks have entered the Daily Cycle Low timing band and formed a swing low. However, a swing low alone does not signal a Daily Cycle Low. A close above the 10-day MA is still needed to complete the signal.

Stocks have now entered the timing band where a Daily Cycle Low (DCL) is expected to form. Last week, the market also formed a swing low, providing the first piece of evidence that the decline may be nearing completion.

At this point, while there is a swing low, the market has not closed back above the 10-day moving average. Without that additional evidence, the Daily Cycle Low has not yet been signaled.

This is one of the most important distinctions in cycle analysis. A swing low identifies a potential turning point, but it is only one part of the process. Waiting for the market to reclaim the 10-day MA helps confirm that buying pressure is beginning to take control.

Patience remains the appropriate approach. The market has taken the first step toward signaling a Daily Cycle Low, but the process is not yet complete.

The next trigger is straightforward. A close above the 10-day moving average will complete the signal and label the current cycle low. Until then, the current daily cycle remains in decline.

Current Framework

Trend: Daily uptrend remains intact.

Cycle: Daily cycle decline within the expected DCL timing band. A swing low has formed, but the DCL has not yet been signaled.

Next Trigger: A close above the 10-day MA will signal the Daily Cycle Low