Cycle Trading

Stocks printed their lowest point on Friday, tagging the 200 day MA. Friday was day 29, placing stocks 1 day shy of their timing band for a daily cycle low. Back in February stocks found support at the 200 day MA which marked the DCL. Stocks appear to have found support again on Friday at the 200 day MA and formed a swing low on Monday. The question is does Mondays’ swing low signal a new daily cycle?

Stocks printed big 776 million Selling on Strength on Monday. The large Selling on Strength number makes me think that stocks still need to complete their intermediate cycle decline. That is because generally speaking stocks to not print large Selling on Strength numbers as they emerge from a cycle low.

However, stocks did print 5 large SOS days as it emerged from the February daily cycle low. It turns out that those SOS days were foreshadowing the volatility that the market experienced since the February low. And I think that the 776 million SOS on Monday is sending the same message. I think that intermediate cycle decline is continuing. Therefore stocks will need to break below the February low of 2532.69 in order to complete their intermediate cycle decline.