Gravitational Pull


Stocks are getting late in their timing band to begin to decline into an intermediate low.

0 spx weekly

The intermediate equity cycle peaked on week 28. Stocks are now in week 30 of their intermediate cycle. While stocks formed a weekly swing high and breached the intermediate cycle trend line last week, we need to see a clear and convincing close below the weekly trend line to confirm the intermediate cycle decline.

Currently, the daily cycle lacks clarity.

1 spx daily

The daily equity cycle peaked on day 21 and printed its lowest point on day 28. I suspect that stocks left behind an early daily cycle low on day 28. We need to see a break above the day 21 high of 2125.92 to confirm a new daily cycle.

However if day 28 did not mark the daily cycle low, then this would be day 31 of the daily equity cycle. With stocks late in its timing band for an intermediate cycle low, it is possible that stocks begin to feel the gravitational pull of the impending intermediate cycle low. And instead of breaking higher they break below the day 28 low of 2067.93. Should that happen then we begin to suspect that the previous daily cycle low of 2045.50 will be lost, producing a failed daily cycle.


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