Cycle Trading

Stocks printed their lowest point on day 39, following the day 28 peak. That placed stocks in their timing band for a DCL. Stocks formed a swing low. Then on Thursday they closed above both the 10 day MA and the declining trend line to confirm the new daily cycle.

However, stocks delivered another bearish signal on Thursday.

Stocks printed another Selling on Strength day on Thursday. So far the 3 bullish days were also SOS days.

It is unusual to see these SOS days as stocks begin to rally out of a DCL. Taking a look at the rally out of the previous DCL we can see that stocks did not print a Selling on Strength day until day 14.

Currently, stocks are in their timing band for an intermediate cycle decline, which is something that I will discuss in the Weekend Report.I believe that the clustering of these SOS days is a warning signal for the pending intermediate cycle decline.