Cycle Trading

Pre-Summary

Stocks broke bullishly out of consolidation on Thursday and closed above the 10-day MA. The move signals a continuation of the daily uptrend and allows us to label Day 18 as a half-cycle low.

Stocks closed below the 10-day MA last week and then printed their lowest point on Monday, day 18. Stocks formed a swing low on Tuesday and proceeded to consolidate below the 10-day MA and above the 7600 support level — until Thursday.

Stocks broke bullishly out of consolidation and closed above the 10-day MA on Thursday. Closing above the 10-day MA indicates a continuation of the daily uptrend and signals a cycle band buy signal. Therefore, we will label day 18 as a half-cycle low.

The bullish response also occurred as RSI bounced from the 30 level and the TSI delivered a bullish crossover, providing additional evidence that the half-cycle decline has run its course.

Stocks are currently in a daily uptrend. The next test is the Day 11 high at 7816.70. A break above that level would establish a new daily cycle high and further strengthen the right-translated structure.

Current Framework

Trend: Daily uptrend
Cycle: Day 18 labeled as half-cycle low
Next Trigger: Break above 7816.70 establishes a new daily cycle high and strengthens the right-translated structure.