Stock Market Surging into Cycle High!

Stock Market Surging into Cycle High!
Nov. 3–5th Shaping Up as Likely Peak…
New Sell Signals Expected in early-Nov.

10/22/15 – INSIIDE Track Update:  Stock Indices continue to rebound, following the culmination of their ‘Capitulation Phase’  (projected for May–August 2015) and their overall ~5-month bearish period (late-April–late-Sept. 2015), the first segment of the larger-degree Crash Cycles converging in 2015–2016.  The Nasdaq 100 – the one Index that did not reverse its weekly trend down during the July/August sell-off – is leading the way higher as it attempts to fulfill that weekly trend pattern and retest its July peak…

The longer that 2015 unfolds, the more it resembles 2000 and the closer the Stock Indices adhere to the expected similarities to that evolving decline (that took 12–18 months from the peaks before many Indices were recognized as truly being in bear markets)… and the more it provides clues as to what to expect in 2016.  Here is how that expectation has been described the past year…

Feb. 27, 2015 – “From the Great Depression DJIA low of 1932, Stock Indices rallied for 40 years into 1972 (with an intervening, 35+% decline 5–6 years prior to that ultimate peak).  That rally carried over into Jan. 1973 – making it a total of 40 years & 6 months – and led to a 50% drop unfolding over the ensuing 2-year period.

      From the Stock-flation DJIA low of 1974, Stock Indices rallied for 40 years into 2014 (with an intervening, 35–50% decline 5–6 years before the present) and have carried over into 2015. Could a similar 2-year/50% drop unfold once a top is signaled?

      If so, it would also be similar to 2007–2009 when the Indices dropped ~50% in less than 2 years.  It would also be similar to 2000–2002 when the DJIA dropped almost 40% while the Nasdaq 100 – the Index that led most of the preceding, 10-year bull market – lost over 80%… in a little more than 2 years.

      In line with what I have described before, my guess (and this is only a guess, based on technical & non-technical factors) is that the next decline will look more like the 2000–2002 decline – during which the DJIA experienced multiple 1-2 month rallies & 1-2 month declines, from Jan. ‘00–Jly. ‘01, before the events of 9/11 exacerbated the bursting of the Dot-com Bubble and confirmed a larger-degree decline.

      Up until 3Q 2001, the DJIA repeatedly rallied to multi-month highs & looked like it was going to mount a new advance… only to turn back down, on a dime.  It would then drop to multi-month lows & look like it was going to enter a larger decline… only to abruptly turn back up. 

That pattern continued for ~18 months even as the bear market was steadily but subtly taking hold.  Only then, did the ‘other shoe’ drop.”

That sounds amazingly similar to what the Indices have done in 2015… including the events since late-August, when the Capitulation Phase matured, and even more so since late-Sept.  Let’s review the high points of this unique parallel (so far)… 

In 2000, the lagging Indices spiked to slight new highs in March and then experienced sharp 1–2 month declines… before rebounding into Sept. 2000 (180 degrees later) and nearly reaching their 1Q 2000 highs.

They then suffered more significant declines into March 2001 (180 & 360 degrees later), rebounded, and then accelerated lower into Sept. 2001 (180, 360 & 540 degrees later). 

In 2015, the lagging Indices spiked to slight new highs in May and then experienced sharp declines into late-August and/or late-Sept.  180 degrees after those final peaks (a period that begins in early-Nov.), the Indices could see the onset of another decline.

And, just as they have done in 2014/2015, the DJ Transports topped early – in 1999, 6–9 months sooner than the latest of the lagging Indices – and experienced a sharp decline of 9–10 months… in 1999/2000 AND in 2014/2015.  The early-2000 bottom was not violated until the 9/11 induced, Sept. 2001 plummet. 

[While I am NOT expecting a perfect replica, I am still anticipating a similar trend evolution and a similar devolution of bullish sentiment… in a very volatile sequence… as was experienced in 2000/2001.  It is likely to be a drawn-out process with a lot of competing and often-offsetting market action & sentiment.]

And, once again, the DJTA could be giving the clearest indication of what to expect next…with a host of daily & weekly cycles projecting an intermediate peak for Oct. 30–Nov. 5th. A high in that time window would perpetuate a 35 day low-low-(high) Cycle Progression, a ~90-degree/~3-month high (May 8th)–high (Aug. 5)–high (Nov. 5th) Cycle Progression,  a 43–45 day high-high-high-(high) Cycle Progression, a 16–17 trading day low (Aug. 24/25)–high (Sept. 17)–high (Oct. 9)–high (Nov. 3rd) Cycle Progression & a 13 trading-day low (Sept. 29)–low (Oct. 16)–high (Nov. 4th) Cycle Progression.   

That would then make for a precarious, ~3-week period – similar to the bulk of May and the bulk of August – between early-Nov. & late-Nov. – when a related, ~90-degree cycle bottoms. 

That is the same cycle that projected the DJ Transports to plummet into late-August and spike below 7600–7700 before setting a bottom.   However, as repeatedly warned, the real problems – in and out of the market – are not expected to take hold until after mid-December...

The S+P futures have a synergistic range of 3–6 month resistance at 2095.5–2105.25/ESZ, which includes weekly trend pattern resistance, weekly 21 High MARC resistance and the August highs.”

Stock Indices fulfilling expectations for sharp rally following late-Sept. cycle low.  November 3–5th shaping up as most likely dates for next intermediate high… and should be followed by sharp decline in the ensuing 3 weeks!  Sell signals taking shape but not yet triggered.  Upside targets nearly reached.  Nov. 3–5th ushers in new bearish period… though not as bearish as future period.

2015 Stock Market Roadmap

May–August 2015Capitulation Phase’

Bears Beget Bears