The 7/07/15 Evening Report

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Stocks breached the 200 day MA and then printed a bullish reversal today on high volume. Stocks appear to be leaving behind a daily cycle low.

2 spx

It is looking more and more like day 51 did not host a daily cycle low. Instead an early 28 day daily cycle low printed on May 6th. And day 51 was actually day 23 and a half cycle low. Continuing with that daily cycle count would make today day 42. That would place stocks in their normal timing band for a daily cycle low, printing a bullish reversal on high volume. A break above 2083.74 forms a swing low and signals a new daily cycle.

And a new daily cycle could also signal a new intermediate cycle.

3 spx weekly

The stocks breached the 50 week MA the last time an intermediate low formed in October have done so again this week. And with the intermediate cycle being stretched at 38 weeks it is likely that stocks are forming an intermediate low this week off the support of the 50 week MA. Since stocks printed a lower low this week we will need to wait until next week for a weekly swing low to form. And a weekly swing low would provide confirmation that today is day 42 of the daily equity cycle.

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2 thoughts on “The 7/07/15 Evening Report

  1. Sorry! Not clear with weekly swing low theory

    If today is DCL why it make another low next week?

    “Since stocks printed a lower low this week we will need to wait until next week for a weekly swing low to form”

    • Yogiyani,

      We are discussing two types of lows. A daily swing low and a weekly swing low. Daily swing lows mark a new daily cycle. (Note that not all swing lows are daily cycle lows, but there can not be a daily cycle low without a swing low). There are usually multiple daily cycles in an intermediate cycle. Therefore an intermediate cycle can have multiple daily cycle lows. But not all daily cycle lows are intermediate cycle lows. A weekly swing low is a requirement for an intermediate cycle low. If a lower low forms this week, then the earliest a weekly swing low can form would be next week.

      Now stocks have yet to form a daily swing low. If one forms today, then we need to monitor it to see if it confirms as a daily cycle low or not. But if a weekly swing low forms next week, it raises the likelihood that it marks an intermediate cycle low.

      LM

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