Bearish Developments

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Stocks rallied strongly off the day 19 bullish reversal and continued through FED Day, closing above both the 50 MA and the 200 MA.

spx

Stocks gave everything back today, losing both the 50 MA and the 200 MA. Cyclically speaking this does not come as a surprise. A failed daily cycle on day 19 should see stocks continue lower for another 10 to 25 days before the daily cycle low prints. Stocks may have just set the declining cycle trend line. Since a daily cycle low is the lowest point following the daily cycle peak, we should see stocks break below the day 19 low of 1993.26 to form their daily cycle low.

Gold also made a bearish break lower today.

gld

Thursday was day 10 for the daily gold cycle. Gold broke below the lower stem of the bear flag to close below the lower daily cycle band, signaling that gold has begun its decline into its daily cycle low. With gold at day 10, we could see gold trend lower for another 1 to 3 weeks before printing a daily cycle low.

The Miners were rejected by the declining cycle trend line today.

gdx

After printing a lower low on Tuesday, day 18, the Miners formed a swing low on Wednesday and tested the declining cycle trend line. The Miners were clearly rejected by the declining trend line on Thursday. With the Miners on day 20, we could still see them go lower for another 8 to 10 days before they print a daily cycle low.

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