We discussed on Monday that one of the confirmations of a DCL is turning the 10 day MA higher. On Tuesday, stocks lost the 10 day MA and turned it lower.
Stocks needed to turn the 10 day MA higher and break above the declining trend line in order to confirm that day 21 was the DCL. Instead, losing the 10 da y MA in a clear and convincing manner signals a continuation of the daily cycle decline — making Tuesday day 27. Stocks should go on to break below the day 21 low of 4305.91 in order to complete their daily cycle decline. Stocks are in a daily downtrend. Forming a swing high below the upper daily cycle band signals a continuation of the daily downtrend and triggers a cycle band sell signal.