Preparing for Upcoming ICL

Stocks have been dipping the past 2 days. We are in a point now that we should expect a half cycle low, so this dip is not unexpected so we tightened stops accordingly. Stock daily cycles typically last 30-45 days, we are currently on day 12 of this daily cycle. We will know for sure when we have a HCL when the 3 day RSI hits oversold levels. 

You can see from the chart above that the Russel, which has been leading stocks this rally, is already at oversold levels on the 3 day RSI.  The NASDAQ is close behind but the S&P has a bit further to go.  The cycle should right translate and trade into higher high's.   If prices don't and the top is in, then the cycle will left translate and most likely head into an Intermediate cycle low.  At week 21, we are entering the timing band when we should expect such an event.

ICL's occur every 20-35 weeks, we are currently in week 21.  We will recommend tightening stops as this plays out and not just exiting our positions. Our Russell stops were hit at 2230 today and S&P stops hit at 3900. Nasdaq stops are still holding at 135000. As we have stated before with run away rallies like this, they do not always follow cycles and you do not want to exit a trade early and find yourself chasing the trade for an entry point as price continues up in case the NASDAQ wants to move quickly 15000.