Cycle trading: Daily cycle decline
|Stocks closed below the 10 day MA on Tuesday to signal the daily cycle decline.
Stocks printed their lowest point on Tuesday, day 42. That places stocks in their timing band for a daily cycle low. Stocks should break below the daily cycle trend line in order to complete their daily cycle decline. However, we may need to be open to the possibility that this is all the correction that we will get at this time.
After consolidating for 3 days, the Banking Index formed a bullish engulfing candle and closed at a new all time high.
The Transports also broke bullishly out of a short consolidation to close at a new all time high.
Stocks have been in a strong daily uptrend. If stocks form a swing low above the upper daily cycle band then they will remain in their strong daily uptrend and trigger a cycle band buy signal. A close above the day 39 high of 4218.78 will have us label day 42 as the DCL.
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