I have had a few emails inquiring about the count of the daily equity cycle, wondering if today was day 22 or even day 48. While we have our daily cycle count at day 11, we cannot rule out the possibility that today was either day 22 or day 48. Admittedly our daily cycle count lacks some clarity, however what is clear is that stocks are printing lower highs. We were also watching for a reversal at the upper trend line. So today, right on cue, stocks printed a bearish reversal.
We are waiting on a break out of consolidation to provide some clarity to our daily cycle count. The bearish reversal postpones that. But the reversal is in alignment with what we see developing on the weekly chart. And it is what we see on the weekly chart that has me thinking that today is day 11.
Stocks printed their yearly cycle low in early October. The intermediate equity cycle peaked on week 18 after emerging out of that October low. This is week 25 for the intermediate equity cycle. Stocks began this week by being rejected by the declining (blue) weekly trend line.
At week 25, stocks are in their timing band to print an intermediate cycle low. If our daily cycle count is accurate with today being day 11, then stocks will need another 4 – 6 weeks before printing a daily cycle low. A peak on day 11 would lock in a left translated formation to the daily cycle, making it likely to see a failed daily cycle form. And a failed daily cycle confirms the intermediate cycle decline.