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Jeff Pierce
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I’m a swing trader of momentum stocks with a holding period of anywhere from a few hours to a few months. I run a number of screens to locate the strongest/weakest stocks out there, using technical analysis to determine my entries and exits. Trying to calculate the intrinsic value of stocks in... More
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  • Daily Cycle Top Likely In 0 comments
    Dec 5, 2013 11:33 PM | about stocks: DIA

    By Poly

    This is an excerpt from this week's premium update from the The Financial Tap, which is dedicated to helping people learn to grow into successful investors by providing cycle research on multiple markets delivered twice weekly. Now offering monthly & quarterly subscriptions with 30 day refund. Promo code ZEN saves 10%.

    (click to enlarge)

    We've waited a long time for the Equity Cycle to peak, but finally after a 36 day rally, I'm certain a top has occurred. While the S&P held its runaway move above the 10dma, it was purely a guessing game as to when it would turn. But now, with a Swing High and a close below the 10dma coming so late (Day 38), there is no doubt this 3rd Daily Cycle is in the declining stage of the Cycle.

    The late afternoon rally today does speak to the underlying strength of the Yearly Cycle. After all, a bull market is certainly hard to keep contained, so going against it is never an easy proposition. Today was also the 4th straight daily decline and the noticeable drop on the daily chart sent the "buy the dip" brigade to the markets rescue.

    (click to enlarge)

    But that should not be enough to help equities here. A 36 day Daily Cycle should require more consolidation time before it could move higher. This Cycle added 150 points while the decline from the tips has been just 40 points. Of course ever mindful that this is a runaway move, I still maintain that a drop back to 1,750-55 should be forthcoming.

    On the Daily Chart, it should end up looking like a fairly sharp drop from the Cycle top. But I believe the snap back in the coming 4th Daily Cycle will be equally impressive. I doubt the S&P, because of its runaway stature, will be slow to retest the 1,800 level.

    Related Posts:

    Euro's New High Negates H&S Pattern

    Equities Appear To Have Put In A ST-Bottom

    Blow Off Top Could Be In The Cards

    Themes: Bull Market, Daily Cycles Stocks: DIA
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