Cycle Trading

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The daily equity made an all time high on Tuesday and closed at an all time high on Wednesday. Despite closing at an all time high, stocks added another Selling on Strength day to this daily cycle.

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While Wednesday only added another 20 million in SOS for this daily cycle, the cumulative SOS number is a whopping 4558 SOS so far. I believe that this is a significant number.

In order to prove that it is a significant number I decided to look at the Selling on Strength numbers of all of the intermediate lows dating back to August, 2007. Specifically I looked at the Selling on Strength numbers of the daily cycle preceding an intermediate cycle lows. I also compared my findings to a random daily cycle as a control.

Four metrics emerged that are useful when discussing Selling on Strength.

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One of the metrics that I discovered had a 50% increase over the average value in three out of four of the intermediate cycles that occurred during the 2007 – 2008 topping process highlighted above.

What was interesting was that this metric was below the average value in the 11 consecutive intermediate cycles that followed the 2007-08 topping process. However the last intermediate cycle and the current intermediate cycle has this metric once again exceeding the average value.

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It is interesting to note that the last time this metric exceeded the average value occurred during the 2007-08 topping process. And after a 68 month run the question is are we going through another topping process?

In my special report on SOS Metrics we will look at all of the intermediate cycles dating back to August, 2007. We will compare the SOS numbers in terms of the aforementioned metrics.

I would like to make this report available here. The Special SOS Report and a complementary 1 month subscription to the Likesmoney Premium Site is available for $25.

The complementary subscription will give you full access to the premium site. It includes:

1) The Weekend Report, which is posted usually Sunday mornings. It discusses Dollar, Stocks, Gold, Miners, The CRB Index, & Bonds in terms of daily, weekly and yearly cycles – Which includes the Likesmoney Cycle Tracker.

2)The Mid-Week Update. Posted on Wednesday’s– This is a review of the daily charts for the above mentioned asset classes.

3)Weekend Update look of the daily & weekly charts of Corn & DBA
4)Weekly Update of the Bullish Percentile Bingo
5) Frequent (just about daily) updates of my proprietary FAS Buy/Sell Indicator

The goal of the Weekend Report is to develop an on-going framework of expectations using cycle analysis.

For the Likesmoney Special Gold Report and 1 Month Trial Subscription click here.

For current subscribers click here.