Fed To The Rescue

Stocks formed a swing low on Tuesday.

We discussed on Monday why I felt that the Fed could not let the markets develop any bearish follow through to Thursdays’ huge drop. Stocks forming a swing low on Tuesday signals that the Fed has managed to abort (for now) an intermediate cycle decline by forcing stocks to print, what I believe is, an early daily cycle low.

While it is debatable that 21 days is too early for a DCL and should only be a half cycle low. What is not debatable is the quick bullish reversal on RSI that is characteristic of a bullish pattern that occurs during the advancing phase of an intermediate cycle. Which aligns with stocks currently being in a daily uptrend. And since a swing low has formed above the lower daily cycle band, stocks remain in their daily uptrend and trigger a cycle band buy signal.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.