Cycle trading: Bearish action

LikesMoney Independent Analyst

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.

Author

LikesMoney

Independent Analyst

Assets (such as stocks, gold, and the dollar) have identifiable cycles.

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