Stocks Reach 2–4 Month Downside Targets

Stocks Reach 2–4 Month Downside Targets;
Initially Validate 5-Month Cycle Low.
Nov. ’16 Low Projects Focus to Apr. ‘17.

11/09/16 Weekly Re-Lay Alert –  ‘Post-Election Boomerang’:

“Stock Indices spiked lower overnight, with the S+P 500 & Nasdaq 100 dropping right to their respective monthly HLSlevels (the extreme intra-month downside targets for November – at 2032.75/ESZ & 4616/NQZ) as they set new 3–4 month lows and fulfilled the majority of expectations for this ~2-week decline.

This comes immediately after the Indices tested & held their weekly HLS levels – while dropping right to monthly support levels & turning their weekly trends down (DJIA & ESZ) on Nov. 4th.

As explained many times, that weekly trend signal is a lagging/confirming one that usually arrives near the culmination of an initial decline & projects two important (though seemingly contradictory) events as it augurs an impending spike low:

1 – On a 1–3 month basis, it confirms that a larger-degree reversal is underway… and projects another wave down after an intervening bounce.

2 – On a 1–2 week basis, it presages an initial – sometimes violent – low and reversal higher, usually in the ensuing days.

If nothing more, the Nov. 9th spike low was certainly ‘violent’…So far, of the S+P’s drop from 2183/ESZ – in mid-August – to today’s low of 2028.5/ESZ, that Index produced ~78% of that decline in the final two weeks – from a high of 2150/ESZ on Oct. 25th.

From a short-term cycle perspective, the Nov. 9th low perpetuated a 15-day high (Oct. 10)–high (Oct. 25)–low (Nov. 9thCycle Progression… the latest phase of an overriding 14–18 day high (Aug. 23)–high (Sept. 8)–high (Sept. 22)–high (Oct. 10)–high (Oct. 25)–low (Nov. 9thCycle Progression… the equivalent of the 11–12 trading day cycle.”

Stock Indices fulfill multiple (2–4 month & 2–4 week) downside objectives with Nov. 9th spike low – to extreme intra-month downside targets (HLS indicator).  This initially validates ongoing analysis for another multi-month low in Nov. 2016 – the latest in a 5-month series that includes the August 2015, Jan. 2016 & June 2016 lows.  The next phase of this Cycle Progression – in April 2017 – holds added synergy & significance.  See Weekly Re-Lay for additional details.