The daily equity cycle peaked last week on day 26. Stocks formed a swing high the next day but then drifted sideways for the next few days. Thursday’s break below the daily cycle trend line signals that stocks have begun their daily cycle decline.
A peak on day 26 locks in a right translated daily cycle formation and sets up the expectation for stocks to print a higher daily cycle low. With Thursday being day 33, stocks should print a daily cycle low over the next 5 to 15 days. Stocks continue to close above the upper daily cycle band which indicates that stocks are in a daily uptrend. Stocks will remain in their daily uptrend unless they close below the lower daily cycle band.