Gravitational Pull

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The daily equity cycle peaked on day 8 and has since been finding support along the 2145 level. Stocks broke convincingly below the 2145 level on Tuesday.

spx daily

Tuesday was day 21 for the daily equity cycle. Stocks not only broke below the support at the 2145 level but they also closed below the lower daily cycle band. While it is possible that stocks are moving into a half cycle low, often times a close below the lower daily cycle band signals that stocks are feeling the gravitational pull of their impending daily cycle low. With Tuesday being only day 21, that leaves stocks another 9 days before they enter their timing band for their daily cycle low. The peak on day 8 sets this up as a left translated daily cycle formation. A break below the previous daily cycle low of 2119.12 forms a failed daily cycle and confirms that stocks have entered into their intermediate cycle decline.

spx weekly

The intermediate equity cycle sports a week 7 peak. This is week 15 and stocks have made 7 consecutive lower weekly highs and looks to be printed its 8th straight lower high. So stocks also appear to being pulled into an impending intermediate cycle low as well. The peak on week 7 sets this up as a left translated weekly cycle formation. Since week 11 is the current weekly low, stocks would need to break below the week 11 low in order to complete their intermediate cycle decline.

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