Bullish Follow Through



The daily equity cycle peaked on day 8. It printed a half cycle low on day 21. Stocks printed a bullish reversal on Monday, which suggested a daily cycle low had been printed. The bullish follow through today makes this day 1 of a new daily cycle.



Stocks closed right at the highs of the day, testing the declining cycle trend line. This trend line has marked resistance for the intermediate cycle decline. The question is would a break above this trend line signal a new intermediate cycle.

There are 2 issues here, timing band and confirmation of the intermediate cycle decline.

If day 31 did mark not only a daily cycle low, but the intermediate low that would place the weekly count at week 16. About 18% of intermediate cycles print an cycle low at 16 weeks or less. So from a timing stand point, it is possible. However, a failed daily cycle is the hallmark of an intermediate cycle decline. Since we have not had a failed daily cycle then I think that this simply extends the current intermediate cycle.

Bonds delivered some bearish follow through to the swing high that formed yesterday.



The daily bond cycle peaked on Friday, day 6. A swing high formed on Monday and Tuesday delivered a clear and convincing trend line break signaling a daily cycle decline.

This is week 20 for the intermediate bond cycle. Bonds are in their timing band to seek out an intermediate cycle low. A failed daily cycle will confirm the intermediate cycle decline. A break below 132.01 forms a failed daily cycle, confirming the intermediate cycle decline.


4 thoughts on “Bullish Follow Through

  1. Hello, why are you still showing 31 LT with a question mark? Haven’t your two tests of a cycle low (i.e. subsequent closing above prior high, and break of daily declining trend line) been met?

    (That said, though I am not the expert here, I am not so certain that the 31th day was the cycle low.)


    • Triangle consolidations are notorious for obscuring daily cycle counts. What troubles me here is that a peak on day 8 clearly forms a left translated cycle. The expectation is that this daily cycle should fail. The reversal off the upper stem today keeps alive the possibility of extending this daily cycle into a failed daily cycle.

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