Stocks Surge from Feb. Cycle Low!
02/14/15 Weekly Re-Lay: “Stock Indices extended their recent rallies (from the Feb. 2nd spike lows) and broke through key resistance levels on their way higher…So far, the ESH & NQH contracts have set new highs while the DJIA & NYSE remain below their late-2014 peaks.
They are likely to set new highs in the coming week(s). There are two other factors that increase that probability. First is the weekly trend pattern in the NYSE. That Index dropped far enough to twice neutralize its weekly uptrend but failed to turn it down. That usually results in a rally back to (at least) the recent highs.
Second is that powerful convergence of extreme upside objectives in the Dow – at ~18,150–18,550/DJIA. That target has been repeatedly discussed over the past 9–12 months and has been cited as the one primary upside expectation – for late 2014 – that was not quite fulfilled.
Recent action is showing the distinct possibility that the DJIA will make another stab at reaching that range of Major upside price targets… and it has added corroborating objectives in the same range.
The most significant – since it is related to many of the other calculations that have been pinpointing that target range – is a new Intermediate LLH created by the Feb. 2nd low of 17,037/DJIA…
Combined with the previous (mid-Oct.) low of 15,855, that creates an intermediate upside objective at 18,219/DJIA. The S+P 500 & Nasdaq 100 created corresponding LLH objectives at 2118.0/ESH & 4400/NQH…the coming week’s resistance – at 18,195–18,333/DJIA – reinforces those targets…
It will be interesting – and potentially very revealing – to see if the NYSE can close above its Nov., Sept. & July 2014 highs… if/when the DJIA is attacking 18,150–18,200 (or higher). If not, the ongoing divergence will be perpetuated.”
DJIA should spike above 18,200 before a top becomes likely. The outlook is still – as described late last year – for a significant decline between early-March & mid-April. The NYSE could/should corroborate the potential for a top and will likely lead the next reversal lower.