Half Cycle Low

Stocks formed a swing high and broke below the trend line on Monday.

Stocks continued lower on Tuesday to print a lower low, but ended up closing higher on the day. On Thursday stocks formed a swing low and broke out to a. new high. Tuesday was day 19, which is too early to expect a daily cycle low. A new high on Thursday, day 20, shifts the odds towards a right translated daily cycle formation. So Thursday’s swing low will have us re-draw the daily cycle trend line and label Tuesday as a half cycle low.

Stocks have been closing above the upper daily cycle band which means that they are in a daily uptrend. Thursday’s swing low signals that stocks will remain in their daily uptrend and triggers a cycle band buy signal with the stop being Tuesday’s low.

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