Cycle Trading

Bearish signals continue to accumulate for stocks.

We discussed here how there have been 7 Selling on Strength days leading up to the daily cycle peak with over 3.2 billion in selling on strength. This type of clustering of large SOS numbers has been a reliable indicator of a pending daily cycle decline.

Other bearish indicators include stocks forming a swing high as they are being turned lower at the 200 day MA. Stocks have also closed below the daily cycle trend line and have breached the 10 day MA. There is also a bearish divergence developing on the True Strength Indicator along with a bearish TSI crossover. Given all of the above along with stocks being just one day shy of entering its timing band for a daily cycle low all point to an imminent daily cycle decline. A close below the 10 day MA will confirm the daily cycle decline.