Stocks Deliver Buy Signal

Stocks formed a swing low on Thursday.

Stocks have been in a daily uptrend that has been characterized by highs forming above the upper daily cycle band and lows forming above the lower daily cycle band. Stocks formed a daily swing low on Thusday. Forming a swing low above the lower daily cycle band indicates a continuation of the daily uptrend and signals a cycle band buy signal.  With stocks approaching resistance from both the 10 day MA and the 200 day MA, one strategy would be to buy the swing low, with a stop at Wednesday’s low. Then positions can be added to with a close above the 10 day MA and then again with a close above the 200 day MA.

Stocks Form Daily Swing High

Stocks formed a daily swing high on Wednesday.

Stocks ran into resistance at the 200 day MA on Tuesday. Wednesday was day 41, placing stocks deep in their timing band for a daily cycle decline.  Any bearish follow through will signal the daily cycle decline.   And once the daily cycle decline begins, stocks will need to turn the 10 day MA lower before the DCL can form.  Stocks should break below the daily cycle trend line as it seeks out is DCL. 

Look Familiar?

Stocks are up against resistance at the 4150 level.

Resistance at the 4150 level caused stocks for form a bearish reversal on. Monday.

Resistance at the 4150 level sent stocks into their daily cycle decline back in June. And at 34 days — this resistance level looks ready to do so again.

Monday was day 34, placing stocks in their timing band for a daily cycle low. If stocks deliver bearish follow through and close below the accelerated (dashed) trend line, that would signal the daily cycle decline. Stocks should then go on to break below the (blue) daily cycle trend line as they seek out their DCL.

Stocks Form Daily Swing High

Stocks ran into resistance at the 4150 level on Monday then formed a daily swing high on Tuesday.

Tuesday was day 30 for the daily equity cycle. That places stocks in their timing band for their daily cycle decline. If stocks deliver any bearish follow through and close below the 10 day MA, that would signal the daily cycle decline. Stocks are currently in a daily uptrend. They will remain in their daily uptrend unless they close below the lower daily cycle band.

Stocks Running Into Resistance

Stocks printed a new daily cycle high on Monday. The new high on day 29 locks in a right translated daily cycle formation.

At 29 days, stocks are in the early part of their timing band for a DCL. Stocks are getting stretched above the 10 day MA and they are running into resistance at the 4150 level. If stocks can break through this resistance then there is little to stop them for testing the 200 day MA. But, rejection by the 4150 resistance level would signal the daily cycle decline. Stocks are currently in a daily uptrend.  Stocks will remain in their daily uptrend unless they close below the lower daily cycle band.  

Trend Line Resistance

Stocks ran into resistance at the declining trend line on Monday.

Stocks have been halted by the declining trend line since late March. Stocks are currently in a daily downtrend. If stocks are rejected by the declining trend line and form a swing high, that would indicate a continuation of the daily downtrend and signal a cycle band sell signal.

Gold Delivers Bearish Follow Through

Gold closed below the 10 day MA on Monday.

Gold ran into resistance at the 2100 level last week. We discussed on Thursday that a close below the 10 day MA would signal the daily cycle decline. Gold should go on to turn the 10 day MA lower as is seeks out its DCL. However, gold is in a daily uptrend. If gold forms a swing low above the lower daily cycle band then gold will remain in its daily uptrend and trigger a cycle band buy signal.

Miner Volatility

Russia attacking Ukraine caused a lot of volatility in the Miners. 

The Miners have been consolidating below the gap that left behind in June and above the previous intermediate cycle high. The Miners are currently in a daily uptrend.  A bullish break out of consolidation will indicate a continuation of the daily uptrend and trigger a cycle band buy signal – with not much resistance until the 38.50 level.  But a close below the 10 day MA will signal the daily cycle decline.