Equity Markets Fulfilling Cycle High
07/18/15 Weekly Re-Lay: “Stock Indices rallied into mid-month after bottoming 2 days early (in DJIA & S+P) but in synch with daily cycles in the NQ-100 &NYSE. The Nasdaq 100 & NYSE bottomed on July 7–9th – 30 degrees from their June 9th lows & 60 degrees from their May 7th lows. These lows came right at the midpoint of the late-Apr–late-Sept. period.
Similar to 2000/2001, every moderate decline is met with an opposing rally and every moderate rally is met with a new sell-off. That pattern is still expected to extend through much of 2015.
The latest rally came after the NYSE joined the list of Indices that have turned their weekly trends down. As is typically the case, that led to a spike low in the ensuing week – in which the NYSE tested & held its weekly HLS (an extreme downside target) – and a reversal higher.
From a global perspective, the Shanghai Composite lost 32+% in ~4 weeks & the Hang Seng Index accelerated into a July 8th/9th low, spiking to new intra-year lows while shedding 20% from its April 28th peak and reaching 12–18 month support around 23,000/HSI.
The DJIA & S+P had failed to turn their weekly trends down, creating the potential for a retest of their highs. The DJIA has rallied back to test its weekly 21 High MAC (18,122) but stayed below its weekly 21 High MARC (18,144)…entering a bounce that was originally expected to last into July 20–23rd and perpetuate a ~30-degree cycle of highs (Jan. 22, Mar. 23, May 20 & June 23) and a related ~60-degree cycle of highs (Sept. 19, Nov. 21, Jan. 22, Mar. 23 & May 20).
By turning their daily trends up, the Indices have re-affirmed that potential.
1–3 & 3–6 month traders should be on the short side of Stock Indices – from when the DJIA was trading at 17,950 up to 18,288/DJIA. Hold until a weekly close above 18,351/DJIA.
2–4 week traders should…” TRADING INVOLVES SUBSTANTIAL RISK!
Stock Indices Reinforcing Potential for July 20–23rd Peak… Watch Out After Then!