Sept/Oct. Precursor to Stock Market Crash Cycles (2015-2016)?

Sept. 19th Sell Signals (NQ & NYSE) Projects Sharp Drop into Oct. 6–10th!
40-Year Cycle of Stock-flation Culminating…
Point of Critical Mass IV

9/25/14 Weekly Re-Lay Alert: “Stock Indices continue to near the point of ‘Critical Mass’, with regard to expectations for a major peak (in late-2014) and the corresponding potential for a significant decline in the ensuing weeks or months (and ‘Crash Cycles’ in 2015–2016).

As examined the past few weeks, there are developing reasons to believe that a peak could have come a week or two early in the DJIA, S+P 500 & Nasdaq 100 – within the normal margin of error for cycles of this magnitude – and about 4 weeks early in the NYSE (when more of its cycles converged), the Index that has been so reliable in producing early-warning signs of both rallies & declines.

Before elaborating on this analysis, let’s quickly bullet-point a few of the more salient factors that were corroborating the Sept. 19th negative daily trend signal in the NYSE & NQZ:

— The NYSE precisely fulfilled its 8–9 week cycle when it peaked on Sept. 3rd.  By rebounding to a lower peak without turning its daily trend up, the NYSE projected a more significant decline this week.

— That Sept. 3rd peak was a perfect double-top with its early-July peak, setting the stage for a more significant decline on an intermediate basis.

— A contrasting 8–9 week cycle argues for a drop into – and intermediate low during – early-October.

— The Nasdaq 100 spiked to a new intraday high while failing to turn its daily trend up.  That signaled a 1–2 week – and potentially longer – top and projected a drop to at least 3984/NQZ (and possibly down to monthly support at 3907–3944/NQZ) in the near term.

— The S+P 500 showed signs that it could see a quick drop to 1937.5–1939.75/ESZ – during the current week – where the latest two weeklyHLS levels and the monthly Raw SPS converge.

[The DJIA has its corresponding support/ downside target at 16,713–16,765.  That range will also become significant – from the perspective of the weekly 21 MARC – next week.  So, it is a pivotal level to monitor closely.]

— Beginning on Sept. 24th, the DJIA, ESZ & NQZ all entered a period when their respective daily 21 MACs were poised to flatten and/or turn down (due to the surging daily 21 MARCs, which finally caught up to current price levels in the past 1-2 days).

— As the daily 21 MACs began to flatten – on Sept. 24th – the Indices gave a quick surge back to test the daily 21 High MAC, a pivotal resistance point that is usually tested as/before this channel is turning negative.  This morning’s action validates that signal.

So, is there a chance that a major top is already forming?  Of course.  There always is.

For 18 months, the Indices have been projected to rally into 4Q 2014 – the culmination of a 1–2 year advance, a 3–5 year advance and even a 40-Year advance from the late-1974 low – the onset of a 40-Year Cycle of ‘Stock-flation’…the Indices have fulfilled multi-year cycles and even monthly & weekly cycles… within 1–2 weeks.  So, to reiterate, it is definitely time to start considering the potential for a major decline.

From a price basis, the DJIA reached its Intra-Year LLH – at 17,326.  The Feb. 2014 low of 15,340 and the August low of 16,333 – almost precisely 180 degrees apart – created this upside target that was fulfilled when the DJIA spiked up to 17,350 and gave its highest close at 17,279.

At the same time, it was testing and holding its weekly LHR convergence at 17,265–17,311/DJIA.  At the very least, that showed that an intermediate peak was likely within 1–3 weeks.  And, as discussed, it often triggers a sharp drop to the weekly HLS.

Those are also signs – like the ones seen in the NYSE in early-September – of a developing multi-month peak…For now, the important thing to watch for is if the DJIA & ESZ can turn their daily trends down (a lagging/confirming indicator) and validate what the NYSE & NQZ signaled on Sept. 19th.  If that occurs, it could trigger a drop into early-October

With the NYSE producing its double-top and the potential for successive declines of equal duration (5 weeks each), it could extend this decline intoOct. 6–10th.  Of course, that would also produce a low that is 8–9 weeks from its early-August low…

…and that would perpetuate a contrasting 8–9 week cycle that has spanned every low – except 1 – since Oct. 7–11, 2013.  With the 3 most significant lows on Oct. 9, 2013, Feb. 3–5th & August 7th, geometric cycles (60-degrees, 240-degrees & 360-degrees) also argue for a low on Oct. 6–10, 2014.

And, if the NYSE can drop below 10,557 during this decline, it would…” [see 9/25/14 Weekly Re-Lay Alert for additional details on why market action is reinforcing projections for a sharp drop into early-October… which could help pinpoint when a MUCH larger decline is most likely!  The 40-Year Cycle is intact].  Futures trading – as well as trading investing in ETFs, stocks & funds involves substantial risk.