Stocks Consolidating

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Stocks have been consolidating the initial surge out of the June intermediate low for close to 3 weeks. Consolidations are typically continuation patterns and with stocks still early in its intermediate cycle we expect stocks to continue higher.

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Stocks printed a higher high on Monday, day 24. The new high assures us of a right translated daily cycle formation. A bullish break of consolidation would send stocks 1 more leg higher before this daily cycle tops. But since stocks are currently 6 days shy of entering its timing band for a daily cycle low, a bearish break of consolidation would send stocks into a daily cycle decline before continuing higher.

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