The daily equity cycle peaked on day 8. Now at day 27, stocks are three days short of entering their timing band to seek out a daily cycle low. Stocks also lost the 50 day MA today, for the third time this daily cycle. With each passing day it becomes more likely that stocks will succumb to the gravitationally pull of the impending daily cycle low.
This is the second daily cycle for the current intermediate cycle. Typically we see 2 to 3 daily cycles per intermediate cycle, so there is a possibility that this daily cycle will fail, leading to the intermediate cycle decline. And so far it is cooperating by having established a left translated structure by virtue of the day 8 peak. A break below the previous low of 1972.56 forms a failed daily cycle, confirming the intermediate cycle decline.
This daily cycle has also delivered three bearish signals that I have only seen prior to the 2009 financial crisis low. That is 3 Quad SOS days. A Quad SOS day is a day where the Selling on Strength exceeds one billion dollars.
The three times it happened prior to the Financial Crisis low of 2009 occurred during three successive intermediate cycles. Now it occurred during the same daily cycle.
Here is something else that is interesting. Listed below are the total accumulated Selling on Strength for the three intermediate cycles prior to the March, 2009 low.
SOS 5556 – 8/2007 ICL
SOS 4106 – 1/2008 ICL
SOS 4365 – 7/2008 ICL
The 11 intermediate cycles following March 2009 low, the between 11/08 and 10/2014, had an average total accumulated Selling on Strength for the final daily cycle of 1829.
In comparison the first daily cycle for the current intermediate cycle printed A SOS of 4.858 billion. The total accumulated SOS for this daily cycle is 8.526 billion.
Those are some big numbers and they are suggesting some sinister for stocks.
I posted a Special SOS Report for subscribers on 11/28/14. I am going to re-post the complete SOS Report on the premium blog. For those of you who are interested, you can gain access to the Special SOS Report and the entire Weekend Report through a trial subscription. The Weekend Report discusses Dollar, Stocks, Gold, Miners, The CRB Index, & Bonds in terms of daily, weekly and yearly cycles.
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