Bullish Follow Through

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We discussed yesterday that lack of a failed daily cycle on Monday combined with the 3434 total Buying on Weakness (occurred in shaded area) makes it is likely that June 9th hosted a 51 day, daily cycle low. One of two scenarios can play out here.

1 spx yellow

One scenario is that stocks could reverse lower and break below June 9th’s intra day low of 2072.14. If that happens then it makes it likely that June 9th was day 23, making today day 28. So, if June 9th’s low is lost, then that also keeps the door open for a break below the early May DCL of 2067.93, which would then form a failed daily cycle.

However, today’s bullish follow through to Monday’s reversal supports the first scenario that June 9th hosted a 51 day, daily cycle low. A break of the declining trend line is needed to confirm this scenario which would make Tuesday, day 5.

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3 thoughts on “Bullish Follow Through

    • That is a very good question.
      A failed daily cycle resolves a lot of things and resets the intermediate cycle count.
      There are signs on the weekly chart of an intermediate cycle decline. A failed daily cycle delivers final confirmation.
      If there is a new daily cycle that goes on to form as a right translated cycle, then we will be force to consider an intermediate cycle decline that did not deliver a failed daily cycle. It has happened but is not common…

  1. Pingback: Clarity | Cycle Trading

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