Stocks Found Support

Stocks printed a huge bearish candle on Wednesday, forming a swing high and closing below the 4700 level to signal the daily cycle decline. With stocks overdue for a yearly cycle low this could send stocks to seek out their YCL.  

But instead of delivering bearish follow through, stocks found support at the rising 50 day MA on Thursday.

Thursday was only day 22 for the daily cycle, which is too early to expect a DCL to form. While stocks broke below the 38 fib level, they should still turn the 10 day MA before they form their DCL. So any bounce off the 50 day MA should be contained by the 10 day MA so stocks can complete their daily cycle decline.

However, stocks are currently in a daily uptrend. If stocks form a swing low and close back above the 10 day MA then that would indicate a continuation of the daily uptrend and trigger a cycle band buy signal. Under this scenario, we would label day 22 as an early DCL.

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