Stocks Need To Cross The Line

Stocks formed a swing high and closed below the 10 day MA on Monday to signal the daily cycle decline.

Stocks closed lower on Tuesday, stopping at the daily cycle trend line. Stocks will need to break below the daily cycle trend line and turn the 10 day MA lower in order to complete its daily cycle decline. Stocks are currently in a daily uptrend. If they form a swing low above the lower daily cycle band that will indicate a continuation of their daily uptrend and signal a cycle band buy signal.

Advertisement

Stocks Take Bearish Turn

Stocks formed a daily swing high on Monday.

Monday was day 31 for the daily equity cycle, placing stocks in their timing band for a DCL. Stocks closed below the 10 day MA, turning it lower, to signal the daily cycle decline. A break below the daily cycle trend line will confirm 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.

Consolidation

Stocks printed a new daily cycle high on Tuesday.  

A new on day 23 shifts the odds towards a right translated daily cycle formation. That aligns with stocks currently being in a daily uptrend. However, stocks are now stretched above the 10 day MA. Stocks have been consolidating the past 4 days, which is allowing the 10 day MA to catch up to price.  Stocks are currently in a daily uptrend.  A bullish break out of consolidation will indicate a continuation of the daily uptrend and signal a cycle band buy signal.  But a bearish break out of consolidation could send stocks to seek out its DCL.

Bearish Reversal

Stocks broke out to a new daily cycle high on Monday but then went on to print a bearish reversal.

A new on day 22 shifts the odds towards a right translated daily cycle formation. That aligns with stocks currently being in a daily uptrend. However, stocks are now stretched above the 10 day MA. Stocks may need to consolidate to allow the 10 day MA to catch up to price. A break below the 3911.79 level can be used as a stop. If stocks find support at the rising 10 day MA and break back above the 3911.79 level, then that could be used to go long once again.  

Stocks Deliver Buy Signal

Stocks broke out to a new daily cycle high on Thursday.

Thursday was day 20 for the daily equity cycle. The new high on day 20 shifts the odds toward a right translated daily cycle formation. That aligns with stocks begin in a daily uptrend. Stocks formed a swing low on Thursday. Forming a swing low above the lower daily cycle band indicates that stocks will continue in their daily uptrend and signals a cycle band buy signal — using the 50 day MA as the stop.

Bullish Progress

Stocks are making bullish progress.

Stocks are currently in a daily uptrend. Stocks formed a swing low above the lower daily cycle band on Friday, which indicated that they remained in their daily uptrend. Now on Monday, stocks closed above the 50 day MA. A close above the 10 day MA will affirm that they will remain in a daily uptrend and signal a cycle band buy signal.

Bear Case / Bull Case

The initial surge out of the day 26 DCL saw stocks get stretched above the 10 day MA. Stocks had been consolidating above the 50 day MA — until Wednesday

Bear Case — The Fed raising rates by .75% caused stocks to drop 2.5% on Wednesday and then another 1.06% on Thursday. Closing convincingly below the converging 50 day MA and 10 day MA indicates something sinister if afoot.  A close below the lower daily cycle band will end the daily uptrend and begin a daily downtrend.

Bull Case — Despite dropping 3.56 % on Wednesday and Thursday, stocks are still in a daily uptrend. If stocks form a swing low above the lower daily cycle band then they will remain in a daily uptrend and signal a cycle band buy signal. A break above 3750.59 will form a daily swing low.

SPX Decision Time

Stocks are in a precarious positions as investors await the outcome of the Federal Reserve policy meeting on Wednesday.

The initial surge out of the day 26 DCL saw stocks get stretched above the 10 day MA and has since been consolidating, which is allowing the 10 day MA to catch up to price. The 10 day MA is about to converge with 50 day MA. With stocks in a daily uptrend, a bullish response to the Fed decision should send stocks higher to form a right translated daily cycle. However, if stocks have a bearish response and close below the converging 10 DMA and 50 DMA, that would set stocks up for a left translated daily cycle formation and a possible failed daily cycle.

Consolidation

Stocks closed above the upper daily cycle band last Tuesday, causing them to get extended above the 10 day MA. .

Stocks have been trading sideways, which is allowing the 10 day MA to catch up to price. Stocks are in a daily uptrend. Stocks will remain in their daily uptrend unless they close below the lower daily cycle band.

The 10/22/22 Weekend Report Preview

The Dollar 

The dollar broke below the previous daily cycle low on Wednesday to form a failed daily cycle, confirming the intermediate cycle decline.

The dollar printed its lowest point on Thursday, day 17, placing it in the early part of its timing band for a DCL. The dollar formed a swing low on Friday. A close above the converging 10 day MA and 50 day MA will signal the DCL. The dollar is currently in a daily downtrend. The dollar will remain in its daily downtrend unless it closes back above the upper daily cycle band.

Stocks

Stocks closed above the 50 day MA on Friday.

Stocks are in a daily uptrend. Forming a swing low above the upper daily cycle band indicates that stocks will remain in their daily uptrend and signal a cycle band buy signal. The next major resistance looks to be the previous daily cycle high and the 200 day MA.

The entire Weekend Report can be found at Likesmoney Subscription Services

The Weekend Report discusses Dollar, Stocks, Gold, Miners, Oil, & Bonds in terms of daily, weekly and yearly cycles.
Also included in the Weekend Report is the Likesmoney CycleTracker

For subscribers click here.