Tonight’s report will sound a lot like The Weekend Report.
Monday was day 8 for the daily equity cycle and stocks closed once again at all time highs.
While stocks are at all time highs we continue to see a bearish divergence developing on the True Strength Indicator foreshadowing trouble ahead.
Another troubling signal is the total accumulated Selling on Strength (S.O.S.) numbers for this intermediate cycle.
Stocks printed a total of 4.858 Billion in Selling on Strength during the first daily cycle. As of Friday, this second daily cycle has added another 3.862 Billion S.O.S. totaling 8720 in Selling on Strength so far for this intermediate cycle.
Today stocks tacked on another 448 million S.O.S. which now brings the total accumulated numbers for this intermediate cycle to 9.168 Billion S.O.S. These are historically huge numbers.
In the Weekend Report I put these S.O.S. numbers in perspective along with a bearish signal that occurred twice in the last two months. The only other time I have seen this bearish signal was prior to the 2009 financial crisis bottom.
Meanwhile gold’s daily cycle is off to a bumpy start.
Gold was held in check today by the 50 day MA. But gold did managed to stay above the developing trend line. Last Monday gold printed its lowest point since the day 22 peak. A break of the declining trend line occurred on Friday to signal a new daily cycle. A swing low is needed to confirm the new daily cycle. A break above last Monday’s high of 1203.60 forms a swing low.
Although it is still early in this new daily cycle, gold is reminding me of its previous daily cycle. Where gold would have a big day up and then consolidate for several days, rinse and repeat.