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Stocks formed a swing low on Monday.

spx

The daily equity cycle peaked on day 13, formed a swing high the next day and then declined. Stocks printed their lowest point last Thursday, day 19, forming a bullish reversal candle. Since 19 days is too early for a daily cycle low, we need to label day 19 as a half-cycle low. The swing low that formed allows us to draw a daily cycle trend line. Therefore, a break of the newly formed daily cycle trend line will signal a daily cycle decline.

Stocks did not close below the lower daily cycle band as they formed their half-cycle low. Therefore stocks maintain their daily uptrend. Stocks will remain in a daily uptrend until they close below the lower daily cycle band.

The dollar reaffirmed on Monday that is is in a daily down trend.

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The previous daily cycle closed below the lower daily cycle band en route to printing its 25 day, daily cycle low, signaling the beginning of a daily down trend for the dollar. The new daily cycle peaked on day 6, but did not close above the upper daily cycle band. On Monday the dollar closed once again below the lower daily cycle band. By closing below the lower daily cycle band the dollar has affirmed that it is in a daily down trend. The dollar will remain in the daily down trend until it can close above the upper daily cycle band.

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