Cycle Trading

Pre-Summary

XLE formed a swing low and closed back above the 10 day MA on Monday to signal Day 26 as the DCL. Bullish follow-through on Tuesday strengthens the new daily cycle as the weekly structure also begins to improve.

XLE broke below the Day 23 low on Friday to extend its daily cycle decline. Friday was Day 26, placing XLE within its timing band for a DCL. XLE formed a swing low and closed back above the 10 day MA on Monday, turning the 10 day MA higher to signal Day 26 as the DCL. XLE delivered bullish follow-through on Tuesday and is now becoming stretched above the 10 day MA. XLE may need to consolidate in order to allow the 10 day MA time to catch up to price.

The larger structure is also improving. XLE remains in a weekly uptrend and is attempting to break bullishly out of a multi-week consolidation. XLE remains in a daily uptrend. The swing low and close back above the 10 day MA indicate a continuation of that uptrend and signal a cycle band buy signal.

Cycle Alignment

Daily: Day 26 signaled as the DCL; daily uptrend remains intact.

Weekly: Weekly uptrend; attempting to break bullishly out of a multi-week consolidation.

Alignment: Daily and weekly structures are aligned bullishly.

Next Trigger: Watch for bullish follow-through from the weekly breakout while the new daily cycle advances.