Cycle Trading: Bullish Bias
|On Thursday we discussed how we were unclear if day 45 hosted the daily cycle low. While we still lack clarity, stocks do have a bullish bias.
A break below Thursday's low of 2566.33 would provide concrete evidence that stocks were declining into an extended daily cycle low. And a break above last Tuesday's high of 2597.02 would eliminate any doubt that day 45 hosted the daily cycle low. Since neither has occurred we will look at what is available.
First off we can say that stocks still closed below the 10 day MA, which is bearish. But that is countered by stocks forming a swing low and closing above Thursday's high. We can see that the RSI is beginning to turn higher. Stocks also formed a bullish engulfing candle on Monday. And stocks continue to close above the upper daily cycle band, remaining in a daily uptrend. All of this points to a bullish bias for stocks.
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