Cycle trading: Bearish action
|Stocks broke below Wednesday's low.
Stocks formed a bullish reversal on Tuesday. Stocks followed that by forming a swing low and closing above the 10 day MA on Wednesday to make Tuesday (day 16) look like a half cycle low. However, stocks dropped on Thursday, breaking below Wednesday's low and closed below the 10 day MA. Breaking below Wednesday's low negated the swing low that formed on Wednesday.
Stocks are currently in a daily uptrend and appear to be forming a triangle consolidation that could still go back and forth a few more days. With stocks being in a daily uptrend the odds still favor a bullish break out of consolidation.
However, there are 4 things that point to a larger degree - intermediate cycle decline is unfolding.
- Current peak on day 11. If that holds -- that has good odds of forming a left translated daily cycle.
- Stocks closed below the 10 day MA, turning the 10 DMA lower.
- RSI did not embed in overbought following the day 16 bullish reversal.
- Stocks preached the daily cycle trend line on Thursday.
If stocks deliver bearish follow through and close below the 50 day that will signal that the larger degree, intermediate cycle decline is unfolding.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.