Stocks printed a bullish reversal today. A break above 2081.30 will form a swing low.
Tuesday was day 17 for the daily equity cycle. Stocks managed to close above the lower daily cycle band, therefore they remain in a daily uptrend. A break above 2081.30 would form a daily swing low and indicate a potential half cycle low has formed.
However, a close below the lower daily cycle band would signal an end to the daily uptrend. The banking index is signaling trouble ahead.
The banking index closed below both the lower daily cycle band and the 50 day MA on Monday to signal that it has entered an intermediate decline. On Tuesday the banking index broke below the previous daily cycle low. This forms a failed daily cycle which confirms an intermediate decline for the banking sector.
The banks could be the first domino to fall.