S+P 500 Completes Wave Structure

S+P 500 Completes Wave Structure.
Indices Reach Downside Extremes…
Multi-month Low Likely.

02/24/16 Weekly Re-Lay AlertThe Dueling Dows, No More

Stock Indices continue to rebound – on balance – since reaching extreme support on Jan. 20th.  Some Indices retested those lows – but remained in congestion – while others (like the DJ Transports) have moved on a more steady incline.

The Jan. 2016 low reinforced a decisive monthly Cycle Progression – that projects a subsequent monthly low for June 2016.  That remains intact and could be further strengthened by market action of the next 1–2 months, particularly if an intervening low were set around the mid-point – in early-April.

[That potential was also increased by the Jan. 20th low, which completed a perfect 2.5 month decline – the midpoint of the 5-month cycle that is the midpoint of the 10-month cycle – from the Nov. 4th highs.  That creates a ~2.5 month high-low-(low) Cycle Progression targeted for ~April 4–8, 2016.]

The January lows set the stage for another series of divergent lows, with many Indices spiking to slight new lows in Feb. – when weekly cycles projected a bottom. Those cycles reinforce related weekly cycles that recur in April.

That repeats the patterns seen in Nov./Dec. ’14 (highs), Jan./Feb. ’15 (lows), Apr./ May ’15 (highs), Aug./Sept. ’15 (lows) & Nov./Dec. ’15 (highs).  It also allowed global Indices to complete their projected declines into February.

The S+P was a prime example, fulfilling not only various cycles that bottomed in February, but also completing a 2nd consecutive decline of 14 weeks (May 18Aug. 24 & Nov. 2–6th to Feb. 8–12th) – a textbook example of wave equivalency.  Several other Indices corroborated.

Price action reinforced that cycle analysis, with so many Indices spiking down to their monthly extremes (HLS) & yearly support in Jan. and then spiking down to weekly extremes & monthly support (as well as daily extremes) in February… a sequential bottoming formation in both time AND price.

That showed that the combined Jan./Feb. lows represent a higher-degree bottom than those seen in recent months… and should hold for at least a few weeks (possibly 1–2 months).. 

On a near-term basis, the remaining Indices (that had not accomplished this in early-Feb.) turned their daily trends up and quickly entered the textbook, 1–2 day pullback before the next advance. 

In doing so, they corrected for 2 days, attacked their daily HLS levels (extreme intraday downside targets), tested & held their daily 21 MAC & daily 21 MARC support and tested their weekly support levels mid-week… a near-perfect setup for a short-term low.

They also did that without neutralizing their new daily uptrends and without turning their intra-month trends down – increasing the potential for another brief rally into month-end…today’s low perpetuated a recent, 8 trading-day cycle (Jan. 20th low–Feb. 1st high–Feb. 11th low–Feb. 24th low) and came at the mid-point of the 16 trading-day low-low cycle between Jan. 20th & Feb. 11thMarch 7th is the next phase of both.”

Stock Indices repeating pattern of 2015 with Jan./Feb. 2016 cycle low.  Next similar sequence is possible in May/June 2016.  Stocks reached extreme downside targets – and yearly support – in Jan. 2016, fulfilling majority of downside potential for 1Q (and possibly 2Q) 2016.  Higher-degree rebound underway.