On Monday we discussed how stocks were attempting to establish their DCL.
While the S&P 500 is still awaiting confirmation of its DCL, QQQ has already signaled its DCL and is approaching confirmation of its ICL.
QQQ has followed a recognizable pattern throughout its advance.
A yearly cycle typically contains two or three intermediate cycles. The intermediate cycle declines have generally found support near the 50 week MA before QQQ resumed its advance.
But not all intermediate cycle declines are alike.
The decline into a yearly cycle low is typically characterized by a failed weekly cycle, where price breaks below the previous ICL.
Adding the yearly cycle lows to the chart reveals an important distinction.
QQQ has already formed a failed weekly cycle, signaling the yearly cycle decline.
Now QQQ is approaching confirmation of its ICL. A weekly swing low followed by a close above the 10 week MA will signal that the ICL has formed.
With the failed weekly cycle already established, the developing ICL raises the possibility that QQQ is also completing its YCL.
The S&P 500 and QQQ may be approaching their cycle lows through different price structures. While the S&P 500 is still awaiting its DCL signal, QQQ is providing more advanced evidence that an ICL, and potentially a YCL, may be forming.
In the Weekend Report, I plan to examine this further and discuss what it means for the S&P 500.
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