Market Cycles and Swing Trading

Bull or Bear

Acknowledging where we are as the stock market cycles, from peak to trough, will increase your swing trading accuracy. These peaks and troughs can be correlated to breadth, price action, and volatility.

Current Market Cycles

We’ve made much of the current cycles, as we sold into strength in late July and buying into the lows in August. If you keep this simple cycle in breadth and price action in mind when you enter and exit positions, your anxiety level will decrease.

The cycle is up for the NYSE. Anticipate a move back to the top of the cycle.

CYCLES - 8 month NYSE

Understanding how these cycles work, and how they can affect your trading is discussed in my book, “Trade and Think Like a Professional Trader”Understanding the four phases a stock or industry group goes through will also help you tremendously with your trading.

Market Cycles – Industry Groups

If we apply the same concept to individual industry groups, we see a bullish picture unfolding for transports. We have a bit more room to the upside at this point in time, so focusing on airlines, rails and trucking make sense.

IYT-Market-Cycle

Market Cycles – Financials

The current cycle is down for financials, though we are near an extreme. Had you paid attention to the current cycle, you’d likely be positioned in other sectors for the past several weeks. That said, anticipate that this current cycle will turn up shortly as we near support.

XLF-Market-Cycles

This exercise, if used on a regular basis will elevate your workflow to a higher plateau. Consider using this approach, like we do every day LIVE during market hours when you take that next trade.

Happy Fry-Day,

Vinny

We’ll be LIVE at 9:20 AM this morning



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Our content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on our Website and wish to rely upon, whether for the purpose of making an investment decision or otherwise.
Investment Warnings
We would like to draw your attention to the following important investment warnings. The value of shares and investments and the income derived from them can go down as well as up; Investors may not get back the amount they invested – losing one’s shirt is a real risk; past performance is not a guide to future performance.

 

Vinny Gambini

Trade Fundamentals w/ Technical Analysis - CANSLIM method using high probability setups and Ichimoku Trend Analysis. Architect, Family Man and Father of three.