Stocks Rally Sharply From Support

Stocks Rally Sharply From Support.
Extreme Downside Targets Met;
Dec. ’16–May ’17 = Vulnerable Period.

11/19/16 Weekly Re-Lay:

“Stock Indices are entering the time frame when diverse cycles have anticipated a serious shift in sentiment – when a 15–18 month topping process (during which every sharp drop is met with an equally strong rally… and vice-versa) has been expected to transition into a developing bear market.  At least one decisive indicator – the weekly trend pattern – corroborates that potential…

When the weekly trend turned down – in the DJIA & ESZ – that signaled the impending completion of an initial decline (since mid-August) – and the time for a low (potentially violent) and subsequent 1–3 week rally.

The Indices created that violent low on Nov. 9th – spiking right to their monthly HLS levels (extreme intra-month downside targets for November) and matching the magnitude of their preceding (2Q 2016) declines.

[In doing so, the Indices also fulfilled the potential to mimic 3Q 2015, when over 75% of the overall decline occurred in the final 2 weeks.  From Oct. 25–Nov. 9th, the S+P dropped from 2149.75–2028.5/ESZ, ~78% of the overall drop from 2184.25–2028.5/ESZ.]…

The one big difference is that the new intermediate decline would dovetail with many other cycles (and monthly 21 MARC analysis, etc.) that pinpoint Dec. 2016–May 2017 as a vulnerable period for a more sustained decline.

Price action remains the primary filter for all of this analysis.  Throughout October, the 1–2 month & 2–4 month downside targets were repeatedly discussed – coming into play at 2017.25–2026.25/ESZ.  That was the extreme downside target for Danger Period #2.

The core of that target was at 2019–2026.25, with October’s monthly HLS (2017.25/ESZ) adding a reinforcing factor.  With November’s HLS (extreme intra-month downside target) coming into play at 2032.75/ESZ, it left the core target intact but stretched the target range a little higher – to 2019–2032.75/ESZ.

For the week of Nov. 7–11th – when a violent spike low was projected – the weekly 21 MARC reinforced that downside objective and was discussed in the Nov. 5, 2016 Weekly Re-Lay:

“In the coming week, it would take intra-week drops below 17,471/DJIA & 2033.2/ESZ to do so… coincide with the weekly HLS in the DJIA (17,491) and the monthly HLS in the S+P (2032.75/ESZ).”    [11/05/16 Weekly Re-Lay]

Those downside objectives aligned with wave targets – where the current drop would match the magnitude of the June decline (at ~17,500/YMZ & ~2040.0/ESZ).  The Nasdaq 100 had its monthly HLS (intra-month extreme downside target for November) at 4616/NQZ and would match its June decline at 4564/NQZ (also, 4555/NQZ was its previous high)

So, all three Indices were fairly consistent.  Consequently, on Nov. 9th, the S+P dropped to 2028.5/ESZ & the NQ-100 to 4558/NQZ (as DJI futures hit 17,418/YMZ), attaining those extreme downside targets… The ideal scenario would… [reserved for subscribers only]…”


Stock Indices spike down to multi-month support & extreme downside targets while setting ‘violent low’ on Nov. 9th.  Sharp rally ensues as Indices prepare for vulnerable period in Dec. 2016–May 2017.  17-Year Cyclecorroborates and begins to turn negative in Jan.–Mar. 2017.  See Weekly Re-Lay & INSIIDE Track for additional details.