Cycle Trading

Stocks delivered another bearish signal on Monday.

Stocks printed their lowest point on Thursday, following the day 28 peak. Thursday was day 39, placing stocks in their timing band for a DCL. While stocks have formed a swing low, we are still waiting on a break of the declining trend line to confirm that day 39 hosted the DCL.

But regardless if day 39 was the DCL, stocks delivered a second bearish signal on Monday. The first was the 523 million selling on strength that printed on Thursday. That was followed up by 216 million selling on strength on Monday. Usually we see selling on strength numbers near cycle tops. It is very unusual to see a SOS number at or near the cycle bottom, unless there is a longer term concern. Which in this case is that stocks are in their timing band for an intermediate cycle decline. This was something that I covered in the past weekend’s Weekend Report.