Cycle Trading

Pre-Summary Oil printed its lowest point on Week 28 and has since begun to recover. This week’s rally has carried price back above the 50-week and 200-week moving averages, providing the first evidence that an Intermediate Cycle Low may be developing. However, additional confirmation is still needed before Week 28 can be labeled as the ICL. Oil printed its lowest point on Week 28, placing it in…

Pre-Summary Saturday we noted that the Dollar had been consolidating below the 10-day moving average while holding above the 100.56 support level. Monday’s breakout above the 10-day moving average and the declining trend line provided the evidence needed to signal the Daily Cycle Low. An equally important lesson is how the Daily Cycle Low migrated from Day 25 to Day 31 as the consolidation…

Pre-Summary Over the past three updates, we’ve followed NVDA as it progressed from finding support at the 200-day moving average to signaling a new Daily Cycle Low. Friday’s breakout completed the next stage of that progression. NVDA closed above the upper daily cycle band, ending the daily downtrend, beginning a new daily uptrend, and signaling that the Intermediate Cycle Low has been…

Pre-Summary Most traders assume the Daily Cycle Low must occur at the lowest price following a cycle peak. While that is often true, there are exceptions. The Dollar is currently demonstrating one of those exceptions as consolidation continues to shift the likely Daily Cycle Low away from the initial low and toward the apex of the pattern. After forming a swing high, the Dollar closed below the…

Pre-Summary Over our last two NVDA updates, we followed the stock as it found support at the 200-day moving average and repeatedly tested the declining 10-day moving average. This week, NVDA delivered the bullish follow-through needed to signal June 29 as the Daily Cycle Low. The focus now shifts to whether the new daily cycle can generate enough strength to reverse the prevailing daily…

Pre-Summary Two weeks ago, we examined NVDA after it had declined nearly 20% from its recent high and found support at the 200-day moving average. Since then, the stock has repeatedly tested resistance at the declining 10-day moving average while holding above the 200-day moving average. Tuesday’s close above the 10-day moving average is the first meaningful improvement, but additional strength…

Pre-Summary Stocks spent several sessions consolidating beneath the 7500 level before finally breaking higher on Monday. From a cycle perspective, the breakout indicates a continuation of the daily uptrend while shifting attention to the next important resistance level that could strengthen the current daily cycle. The recent consolidation below the 7500 level allowed the market to digest its…

Pre-Summary Semiconductors have led the broader market throughout June, as shown by the SMH:SPY ratio chart, which compares the performance of semiconductor stocks to the S&P 500. From a cycle perspective, that leadership remains intact. However, the recent pullback has brought the ratio to an important support level that could determine whether semiconductors continue leading the market. The…

Pre-Summary Gold has confirmed a new Daily Cycle Low after reaching Day 39, deep within its normal timing band. From a cycle perspective, this is an important step because the market has shifted from searching for a low to developing a new daily cycle. However, the larger trend has not yet changed, leaving traders focused on whether this rally can continue. Gold reached an ideal window for a…

Pre-Summary NVDA has retraced nearly 20% from its recent high and found support at the 200-day moving average. While confirmation is still needed, the current setup offers an attractive risk-to-reward opportunity. From a cycle perspective, NVDA has retraced 19.66% from its recent high, printing its lowest point at 189.80 on Monday. The decline found support at the 200-day moving average before…

Pre-Summary The daily cycle count had remained uncertain for several weeks as competing scenarios developed. Monday’s price action finally provided the confirmation needed to resolve that uncertainty. From a cycle perspective, the status of the daily cycle had not been clear—until Monday. Stocks did not turn the 10-day moving average lower when they printed the day 34 low. Then, when stocks…

Pre-Summary Stocks remain at an important daily cycle decision point. The daily uptrend is still intact, but competing cycle scenarios remain in play. Confirmation—not anticipation—will determine which scenario prevails. From a cycle perspective, stocks spent much of the week consolidating between the 10-day and 50-day moving averages before closing below the 50-day moving average on Friday.…

Pre-Summary Outperformance is measured by producing better results than a benchmark. After nearly four years of underperformance, small caps are beginning to show improving relative strength versus the S&P 500. Outperformance is the act of producing better results than a benchmark. One of the simplest ways to measure an asset’s performance is to compare it to the S&P 500. The IWM:SPY ratio…

Pre-Summary Yesterday we discussed the competing daily cycle scenarios developing in stocks. Tuesday’s decline shifted the focus to the 50-day moving average, where the bulls are now attempting to defend the daily uptrend. The next confirmation signal should determine which cycle scenario ultimately prevails. Yesterday we discussed how stocks were consolidating above the 10-day moving average…

Pre-Summary Stocks remain at an important daily cycle decision point. While recent price action has obscured the cycle count, consolidation above the 10-day moving average is helping define the next confirmation level. From a cycle perspective, stocks signaled day 48 as the Daily Cycle Low after forming a swing low and closing above the 10-day moving average last Monday. However, a swing high…

Pre-Summary Bonds are breaking above the 200-day moving average, improving the daily structure while testing an important longer-term resistance area. Bonds broke bullishly out of consolidation this week, closing above the 200-day moving average after several sessions of testing resistance. The breakout also locks in a right-translated daily cycle formation, reflecting improving internal…

PRE-SUMMARY Oil continues to decline into its intermediate cycle timing band as price approaches a major support zone formed by the converging 50-week and 200-week moving averages. Oil was rejected by the 10-week moving average the previous week and declined 6.92%. That weakness has continued this week, with Oil delivering bearish follow-through and falling nearly 10% as the decline extends. …