We discussed last week that stocks needed to close above the declining trend line to confirm the new daily cycle.
Stocks closed convincingly above the declining trend line on Thursday then deliverered bullish follow through on Friday and Monday to close above both the 50 day MA and the upper daily cycle band. Closing above the upper daily cycle band ends the daily downtrend and begins a new daily uptrend. Closing above the upper daily cycle band also indicates that the intermediate cycle low has been set.
The decline into the ICL has stretched the ‘elastic band’ lower. A quick recovery of the all time highs could trigger a final melt-up phase.