Lower Lows

The Transports, the Banks, the Nasdaq and the Russell all printed lower lows on Thursday.


However the S&P did not print a lower low.

Stocks printed their lowest point on day 45, placing them in their timing band for a daily cycle low. Stocks did form a swing low and managed to close above the 50 day MA to signal a new daily cycle. However, stocks have not been able to break above the declining trend line to confirm a new daily cycle. That makes Thursday day 53 for the daily equity cycle.

A daily cycle low is defined as the lowest point following the cycle peak. Since the other indices and sectors formed lower lows, I expect that stocks will too. Stocks should break below the day 45 low in order to complete its daily cycle decline. Once that happens the formation of a daily swing low will have good odds of marking the daily cycle low.

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