Stocks Poised for Drop into late-June
06/11/16 Weekly Re-Lay:
“Stock Indices have rebounded since fulfilling intermediate analysis for a drop from April 19th/20th into May 16–20th. That triggered an ensuing rebound that was expected to peak in early-June. The Indices are beginning to reverse lower but more confirmation is needed…
Stock Indices are slowly validating the potential for an intermediate peak in the first half of June… and remain vulnerable to a sharp drop into late-June–early-July (~5 months from the late-Jan./early-Feb. lows – that were ~5 months from the preceding late-Aug./early-Sept. ’15 lows).
The action of the coming week needs to clarify the significance, longevity & degree of the next potential bottom. Almost identical to Nov./Dec. 2015, the Indices are within striking distance of their previous (April 19/20th) highs – even 7–8 weeks after setting them.
And, just as in Jan. ’16 & Aug. ’15, the Indices are positioned to where they could see a sharp 2–3 week drop to culminate the latest cycle. The Nasdaq 100 – which set its highest (secondary) daily close on June 2nd – has now turned its intra-month trend down, increasing the potential for a follow-through decline in the coming week(s).
All of these Indices are initially validating the potential for an intermediate peak (at least a 2–4 week peak and potentially longer) in the first half of June. That would perpetuate a very consistent 6-month/~180-degree cycle (most obvious in Russell 2000) that includes a high (monthly close) in June ’14, a high in Dec. ’14 & subsequent highs in June ’15 & Dec. ’15.
A high in the first half of June ‘16 (June 1–10th) would fulfill that Cycle Progression AND complete a larger-degree 50% rebound in time (8 months down/4 months up)… and also fulfill the weekly LHR indicator.
From a fundamental perspective, it should not be overlooked that European Indices really triggered this latest sell-off and they are entering a very uncertain 2-week period – leading into the UK’s vote on Brexit (June 23rd).
1–3 & 3–6 month traders & investors could have re-entered the short side of Stock Indices at 17,912–18,016/DJIA, 2077.5–2105.25/ES & 4378–4545/NQ and should…[reserved for subscribers only]”