When it comes to the Daily Cycle, especially 1^st Daily Cycles from a series of up trending Investor Cycles, there is only so much downside one should expect.  That’s essentially what we have in the equity markets, a long history (4 years) of 1^st Daily Cycles finding the necessary bid to power out of Cycle Lows. 

In this particular case, there is now little doubt that a new Cycle is underway.  The Cycle extended out to 46 trading days and was technically a much deeper correction than one would expect.  The oscillators have turned higher, the MACD should cross within 3-5 sessions, and the S&P is back above its 10dma.  A little more strength and the trend-line will be broken too.      

The Bollinger Bands on the S&P are as tight as I’ve ever seen and there is no doubt now that the Daily Cycle has topped.  This being Day 37 (of an expected 40 day Cycle) this action is certainly part of a decline down towards a Cycle Low.  But the problem (for bears) is that the S&P isn’t dropping in price!  I will grant you that the chart is looking a little “toppy” here, but at the same time the bears have unsuccessfully tried to roll this market over for 17 sessions now.  You will notice that from a technical and detrended price standpoint this Cycle is well and truly approaching DCL levels.