Stocks daily cycle low is impending.
We’ve got enough of a decline at this point that I can say with conviction the markets are moving down into their daily cycle low. The runaway scenario is still on the table as long as the SPX doesn’t drop below 2015 before bottoming.
But make no mistake, this is only a profit taking event to cool off sentiment.
Remember, the time to buy is when you are scared. We are going to get a great buying opportunity any day now. Once the daily cycle low (DCL) is complete, the second daily cycle will test the all-time highs.
One or two days more down days and the RSI (5) will reach oversold.
As long as the correction isn’t larger that 60 points, the runaway scenario is still on the table.
Either way though, once the daily cycle low (DCL) is done, the market is going to test the all-time highs before the intermediate cycle tops.
The McClellan oscillator is getting to levels that should force the DCL and turn the market back up. One or two more down days should do the trick.