Stocks Completing Bull Market (4Q 2014?)
9/22/14 Weekly Re-Lay Alert: As described previously, an important part of analysis is taking the known factors – whether they are current or future cycles & price indicators – and developing a perceived scenario that would fulfill or validate the greatest number of those factors (synergy)…
That ‘scenario’ is used as a basis for comparison, to assess how much subsequent market action is validating it… and how much it is contradicting it…In many cases, these scenarios are used as setups – when a market is nearing an important (expected) turning point or trading signal…
In the case of one complex, multiple scenarios are developing on multiple levels – with the potential for some or all of them to work in synch…
Stock Indices are that market and have been – for the past ~18 months – expected to steadily work higher into 4Q 2014, the ideal time (the time with the greatest synergy of cycles & timing indicators) for a major peak…
Considering that the Indices set new highs in Sept. 2014, they have come to within 1 period – a normal margin of error – of fulfilling the weekly, monthly & yearly cycles converging in Oct. 2014. In other words, Stock Indices have entered the time when they should be watched very carefully – for any signs of a developing top and reversal lower.
A few of those signs are already developing and were just discussed in the 9/20/14 Weekly Re-Lay…As discussed last week, the NQZ turned its daily trend down before triggering a normal 1-3 day reactive bounce. The NYSE was in a more negative setup – having signaled a top on Sept. 4th.
As both of these rebounded into Sept. 19th, they neutralized their daily downtrends and pinpointed today – Sept. 22nd – as the ideal date for a reversal lower and a drop to new recent lows (below the Sept. 15th/16th lows). That sell signal targets a likely drop to 3984/NQZ – and possibly down to monthly support – in the near term…
If this sell-off extends beyond Sept. 26th – and/or if the daily trends turn down in the DJIA & ESZ – it would show that an intermediate top is taking hold.
…and that could have an impact on the primary, bigger-picture scenario.
There is another support level – of increasing synergy – that should also be monitored this week. It comes into play at 1937.5–1939.75/ESZ – where the latest two weekly HLS levels and the monthly Raw SPS converge.
As explained in the 9/20/14 Weekly Re-Lay, the DJIA & ESZ had – last week – spiked up to their extreme resistance levels (weekly LHRs) and held them… another sign of a developing peak. This often results in a reactive move down to a weekly HLS in the ensuing weeks. So, those levels in the ESZ are taking on heightened significance. For now, the Indices need to… [see 9/22/14 Weekly Re-Lay Alert for additional details on why market action is warning of an impending sharp drop.. and why the action of Sep. 23–26th could corroborate that].