Cycle trading: Clear and convincing bullish break
|Stocks are making a clear and convincing bullish break today.
We have discussed this megaphone pattern here and here. It looks stocks are ready to begin the next leg higher.
After piercing the upper megaphone trend line on day 6, stocks have been consolidating between the September high and the October high. Today, stocks are making a clear and convincing break above the upper megaphone trend line, forming a swing low. Stocks are in a daily uptrend so today’s swing low signals a continuation of the daily uptrend and triggers a cycle band buy signal. A stop can be placed below Monday’s low. And a close above the day 6 high of 3645.99 would mean that a bubble scenario is back on the table.
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