Stocks Tracing Out Bottom
02/06/16 Weekly Re-Lay: “Stock Indices – first & foremost – remain in weekly downtrends, consolidating above their Jan. 20th lows. Those lows need to be penetrated (or at least retested) in order to validate the potential for another low… The Indices were expected to rebound from the Jan. 20th lows – back up to 16,340–16,630/DJIA, 1936–1968/ESH, 4340–4431/NQH & 9550–9730/NYSE.
Except for the NQ-100, those Indices did test those ranges & set initial highs in early-Feb. – 90 days/degrees from the Nov. 3rd high & 60 days/degrees from the Dec. 2nd high, while completing a .618 rebound in time. Following that, the S+P & NQ 100 gave weekly 2 Close Reversals lower.
This should be significant but there remain conflicting signals that could extend this volatility – alternating between new lows in some Indices & new (rebound) highs in others (i.e. NQH could set new lows in coming week, then DJTA could set new rebound highs after that).
…the potential for violent, two-sided trading still exists until the DJTA, NYSE & S+P Midcap (and others) turn their daily trends back down…Stock Indices reached their rebound targets and reversed lower, adding another level of credibility to the overall outlook. In the process, the DJIA & ESH only neutralized their daily downtrends. As a result, they should work their way back down to the Jan. 20th lows.”
Daily & weekly signals project retest or spike below Jan. 20th lows in near term. Multi-month, late-Jan./early-Feb. cycle lows should hold through 1Q 2016. June 2016 = Next monthly cycle low.