Cycle Trading

Stocks formed a swing high and closed below both the accelerated trend line and the 10 day MA to confirm that the daily cycle is in decline.

Tuesday was either day 50 or day 20 for the daily equity cycle. While the daily cycle count is not clear, it is clear that stocks are declining into a cycle low. It is also clear that stocks printedanother Buying on Weakness day.

Stocks printed a huge 1158 Buying on Weakness on Tuesday.

The clustering of the BOW days is becoming significant and has so far totaled 5595 million. To put this in perspective lets look at the last time there was a significant cluster of BOW days, which happened to be at the last yearly cycle low.

The Buying on Weakness days totaled up to 5043 million between 8/25/16 and 11/04/16.

These clusters of Buying on Weakness days typically foreshadow a major cycle low.