Stocks Rally From Late-June Cycle Low
07/06/16 Weekly Re-Lay Alert – ‘Late-June Cycle Low II’:
“Stock Indices spiked lower into late-June – on Brexit follow-through selling – extending the declines from mid-April & entering the 2-week period when an intermediate low was most likely. With the weekly trend patterns primed for an intermediate bottom, the Indices tested weekly support levels & reversed higher (last week) – initially validating those technicals.
At the same time, the DJIA & NQU attacked & held their ascending weekly 21 Low MACs – support that had risen up to meet price action, increasing the potential for a near-term bottom. Those lows perpetuated the ~5-month & ~10-month low-low cycles that have been the focus of analysis since early-2016… and which project future focus to Nov. 2016.
Several Indices fulfilled minimum expectations for the drop into late-June – with the NQU losing almost 10% from its April peak as the DJ Transports lost nearly 14% in the same period. The Russell 2000 suffered similar losses as the Nasdaq 100… but in just 3 weeks (since June 8th).
With support holding at those lows – and those lows occurring above the Jan./Feb. & Aug./Sept. lows – it places them in a more bullish position, at least during the first two weeks of July.
From the perspective of the DJIA, the eternally-optimistic Index – that rally could push it to new all-time highs, with several LLH & LLRlevels aligning at 18,600–18,700/DJIA.
In contrast, the DJTA, a few other domestic Indices, and most global Indices all argue for a much lower high in/around mid-July… even as the Nasdaq 100 is in the middle – capable of retesting its early-June peak, possibly making it back to its mid-April high, but far less likely to retest its late-2015 peak (and then dropping into late-July cycles).
The primary deciding factor is now the intra-month trend – needing to turn up (with daily closes above 18,002/DJIA, 2104.75/ESU & 4451/NQU) in order to project additional upside.”