Intermediate Support

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Stocks closed lower once again. But I am starting to see signals of an impending daily cycle low.

spx daily

The large Buying on Weakness number and the bullish divergence on the True Strength Indicator are 2 signs signaling that the daily cycle low is imminent. The reversal into the close has eased the parameters for forming a daily swing low. A break above 2044.21 will form a daily swing low which at this point will likely mark the daily cycle low.

If a swing low forms tomorrow, then stocks would have remained above the lower daily cycle band. Which means that stocks would remain in a daily uptrend.

And on the weekly chart stocks are approaching Intermediate Support.

spx weekly

Stocks peaked on week 10 and have formed a weekly swing high. The daily cycle decline has stocks testing the 50 week MA. If a daily cycle low forms here that will allow stocks to remain above the 50 week MA. It would also set the intermediate cycle trend line.

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2 thoughts on “Intermediate Support

  1. Thanks for your work. What is the longest DCL you’ve seen in stocks? Are we getting to be way over 36 to 45 days?

    • Emerging from the 2009 bear market low there were some QE fueled cycles that ran long. A 53 day cycle printed its DCL in 5/2009. And then a 61 day cycle printed its DCL in 5/2010. Now February just saw a 60 day DCL and here we are likely to confirm a 67 day DCL. This makes me wonder if there is a stealth QE going taking place …

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