Stocks Reinforce Cycle Highs

Stocks Reinforce Cycle Highs;
Mid-Aug.–late-Sept. Sell-off Signaled.
Dual ‘Danger Periods’ in late-2016!

08/17/16 Weekly Re-Lay Alert: 

“Stock Indices have entered the first of two vulnerable periods in the second half of 2016… after moving through the transition period linked to the ever-recurring 32–33 Week Cycle – on August 1–12th.

August 1–12th was also the perpetuation/ culmination of an overriding, ~66-Week low (Nov. ’12)–low (Feb. ’14)–high (Apr/May ’15)–high (early-Aug. ’16Cycle Progression – a 15–16 month cycle that has governed the Indices for most of the past decade.

The combination of these two uncanny cycles is just one (of many) reasons why I expect a multi-staged decline to now take hold – creating an initial 1–2 month decline (which has followed each phase of the 32–33 Week Cycle) but then morph into a larger-degree decline after an intervening bounce.

That is also in sync with the expected parallel to 2000–2001 (in the DJIA & DJTA) – in which 15–18 months of a wide consolidation (with an initial 10–20% decline in the late-Apr.–late-Sept. ’15 period) were projected to unfold before a more sustained and convincing decline takes hold.

That scenario pinpoints 4Q 2016 for the time when that sustained decline is most likely to reach fruition.  The first (potential) intermediate drop is expected from mid-August–late-Sept.  If/when that unfolds, it should provide some clarifying factors for the ensuing outlook… and ensuing decline.

Another corroborating (longer-term) indicator is the monthly 21 MAC & 21 MARC.  The Indices are now 21 months from late-2014 – when they began to trace out a multi-month/multi-quarter topping phase after an accelerated advance… with an Index like the DJTA setting its all-time high in Nov. 2014.

…in Aug.–Oct. 2016 – 21 months later – the corresponding monthly 21 MACs are more likely to flatten and more prone, or primed, to turn down if/when only a moderate setback takes hold.

That is another key factor that has continued to pinpoint late-2016 as the time when this lengthy topping process would transition into a more convincing decline.

Price action is validating these cycles as all the Indices surged to their intermediate upside targets with the DJIA continue to bump up against 18,600–18,700/DJIA.  That fulfilled the bullish expectations for rallies from the late-June cycle lows…

Combined with the 32–33 & ~66-Week Cycles, that is another reason why the most likely time for a new decline is right after mid-month.  It would take daily closes below [Reserved for subscribers;  Stock Indices poised for initial overall drop from mid-August into late-September (watch August 15th–26th for first decline) in fulfillment of the FIRST ‘Danger Period’ in late-2016.  Another should soon follow.  See complete 8/17/16 Weekly Re-Lay Alert for expanded analysis.]