Growing Bearish Divergence


Stocks have been closing above the upper daily cycle band, which indicates that they are in a daily uptrend. Despite being in a daily uptrend, some bearish concerns are beginning to develop.

spx daily

This is month 11 for the yearly equity cycle. Stocks are due to begin their decline into a yearly cycle low. We can see that the momentum indicators are beginning to develop bearish divergences. A failed daily cycle is required to begin the yearly cycle decline. So we are watching of signals that the daily cycle will develop as a left translated cycle. A close below the upper daily cycle band usually signals the start of the daily cycle decline. Then a close below the lower daily cycle band results in an end to the daily uptrend and possibly the beginning of the daily downtrend.


One thought on “Growing Bearish Divergence

  1. Pingback: Stocks Deliver Warning Signal | Cycle Trading

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