Stock Market Sell Signal; Crash Near?
June 24, 2015 – Stock Indices have just triggered a new 1–4 week sell signal (see Weekly Re-Lay) during their June 18–22nd rally. That should spur an accelerated decline into month-end… and ultimately into July. That corroborates the myriad of 7-Year, 17-Year & 40-Year Cycles – all of which have been projecting a sharp drop in stock prices between early-May 2015 & late-Sept. 2015.
The late-June/early-July period remains a pivotal one when a more substantial drop could/should take hold. It also represents the time when Gold, Silver & Precious Metals should complete their multi-year declines and enter a new advance. A specific week – with the greatest synergy of cycles for that bottom – has been pinpointed and revealed to subscribers. Here is an excerpt of today’s Alert:
06/24/15 Weekly Re-Lay Alert: “The first half of 2015 is nearly complete. Along with that, many of the transitions projected for this time frame are also nearly complete. The intriguing – and revealing – factor will be when a sudden sign of a shift appears. In reality, there will probably be many of them.
But, I am referring to those ‘game-changers’ that usually emerge when one (or more) consistent ‘correlation’ is suddenly turned on its head and an entirely new paradigm takes hold. I have sometimes used market events of 4Q 1987 as an example.
One merely needs to look at the charts of Bonds, Stock Indices & Gold – leading into and out of that period – to get a picture of what I am describing. Bonds had been heading lower for ~18 months, a result of the strengthening economy and rising stock market. Stocks climbed in the face of falling Bonds for about 17 of those months. And then, the sudden shift took hold – in Sept. & Oct. 1987.
A related analogy involves 2008 and the relationship between the Dollar & Stock Indices. For over five years, a plummeting Dollar coincided with – and even supported – a rising stock market. That correlation held into late-2007 when the Dollar finally broke to new 40-year lows and then – BANG! – it was no longer a positive for Stock Indices.
That was also the time – in 4Q 2007 – when Gold finally broke out to new multi-decade (and quickly to historic) highs. From late-2002 until Sept. 2007, Gold had risen with Stock Indices – both reflecting a rising economy and a falling Dollar. The correlation worked magnificently… UNTIL IT DIDN’T!
Since 2011, falling Gold & Silver prices and falling commodity prices have coincided with rising stock prices… and a rising Dollar (the exact opposite correlation to what occurred in 2002–2007). However, mid-2015 has been pinpointed – for several years – as the time when that deflationary price move would ultimately bottom.
If history is any indication, there could be a sharp divergence – or separation – of the falling metals/rising stock prices correlation right at that transition point…
In fact, that has already been the case as the latest drop in Gold & Silver – since mid-May (the same time the DJIA & S+P 500 set their latest highs) – has dovetailed with an overall decline in stock prices. That could continue for a short while… until Stock Indices hit the acceleration point (lower) and suddenly Gold rallies on ‘flight to quality’ or ‘safe haven’ fears.
Late-June/early-July 2015 has always been the focus for the bottom in Gold & Silver. So, a sudden shift like that is likely to occur surrounding that cycle bottom. And that is right smack in the middle of another decisive cycle that was revisited in 2014…
One of the (many) cycles that pinpointed this time frame was the ‘17-Year Cycle of Financial Crises’ that most recently timed the Russian Ruble crisis of mid-1998 (that piggy-backed the Asian Financial Crisis)…
In 1998, the DJIA saw an initial decline from early-May into mid-June. That was followed by a brief bounce and then a sharper, ~20% drop in July & August 1998. That decline ultimately bottomed in early-October 1998.
17 years prior to that, another financial crisis unfolded in which the DJIA topped in early-May 1981 and then saw its secondary high in mid-June. It then entered a ~21% decline – ultimately bottoming in late-Sept./early-Oct. 1981… a 17-Year precursor to 1998.
In 2014, I discussed this cycle (as well as the mid-point of the 17-Year Cycle of Stock Crashes & Corrections**) and explained why it created the potential for a similar ~20% decline between late-April/early-May 2015 & late-Sept./early-Oct. 2015.
That coincided with many diverse cycles, including the 32–33 Week & 66-Week Cycles that peaked in late-April/early-May 2015.
All of the Indices set peaks between late-April & mid-May 2015. Most of those peaks have continued to hold. And all of these peaks ushered in an initial drop into mid-June, very similar to what took place in 1998. They are now approaching the July–Sept. period, when the sharpest declines (in these cycles) have historically taken place.
[**The 17-Year Cycle of Stock Crashes & Corrections* – that was discussed in detail in 2007 and projected a 1–3 year/35–50% drop in Stock Indices – was also part of this discussion, as 2015/2016 timed the mid-point of that cycle. In July–Sept. 1990, the previous incarnation of that cycle, the DJIA also experienced a ~20% decline in 3Q.]
That is also in synch with a related, 7-Year Cycle – detailed throughout the past two decades – that timed a ~40% drop between early-May & early-Oct. 2008 and a ~29% decline between mid-May & late-Sept. 2001. That 7-Year Cycle also timed that pesky Aug.–Oct. 1987 decline of ~41% in the DJIA. An overlapping, 14-Year Cycle (1973–1987-2001–2015) corroborates that analysis.
So, from a longer-term cyclic basis, the markets are entering a 3-month period when volatility has consistently increased… and when stock market declines have consistently taken hold. On a short-to-intermediate-term basis…
Stock Indices have also just entered a 5-week period when the weekly 21 MAC could trigger multiple negative signals. Part of this has already been discussed (see recent Weekly Re-Lays) and it would take a weekly close belowxx,xxx/DJIA to trigger a bearish combination of confirming sell signals.
In addition, the weekly 21 Low MARC will move from 17,136/DJIA this week & 17,037/DJIA next week… to… 18,054/DJIA during the week of July 20–24th. That sharp rally – in the 21 MARC – is a potential negative for the corresponding 21 MAC.
Why?
It represents the replacement levels for that channel. So, the DJIA would have to drop below 17,136 this week in order to turn the weekly 21 Low MAC down. However, on July 20–24th, it would only have to trade below18,054/DJIA (where it is currently trading) in order to turn that channel negative.
Another way of putting that is to explain that the higher the 21 MARC moves, the easier it is for the 21 MAC to turn down. During a normal uptrend, a steady consistent advance in the 21 MARC is normal… and is a positive factor. However, it is when price has stagnated and the 21 MARC suddenly surges that it threatens to overtake (exceed) current price levels and suddenly become a negative factor.
So, right in the midst of all these anticipated cycles – surrounding mid-2015 and encompassing late-April/early-May through late-Sept./early-Oct – another corroborating factor is poised to turn negative. ALL of them focus on 3Q 2015 for the fireworks to begin.”