Stocks Turn Intra-Month Trends Up; Could Extend Rallies into Mid-May.

05/06/24 – “Stock Indices remain in the second stage (a likely 2 – 3 week reactive rally from the April 19th lows) of what is expected to be a 2 – 3 month sell-off after fulfilling multi-year upside price targets and cycles in all six indexes.  In Elliott terms, they are in a likely ‘b’ wave bounce – sandwiched between an initial ‘a’ wave decline and a future (potentially sharper) ‘c’ wave plunge.

The ‘a’ wave sell-off fulfilled analysis for an initial drop from late-March into April 19th – enveloping the Month of Aggression (leading into the Date of Aggression)…

That reinforced the outlook for a substantial drop in March – May/June 2024 – fulfilling a 50 – 51-month low (Oct 2011) – low (Jan 2016) – low (March 2020) – (low; May/June 2024Cycle Progression.  However, more confirmation is needed.

If the DJIA & DJTA match the duration of previous (primary) declines – lasting ~3 months/~13 weeks – they could see an overall drop into mid-June 2024.  That is intriguing since a decline into mid-June ’24 would perfectly fulfill another phase of the ~2-Year Cycle – tied to the initial lows set in mid-June 2022.

The DJIA needs a weekly close below 37,611/DJIA to turn its weekly trend down…Stock Indices have entered the 3rd week after a pair of indicators (weekly trend & HLS) helped time the April 19th low while projecting a multi-week reactive bounce to follow…

Most have turned their intra-month trends up, projecting a rally to monthly resistance levels.  They come into play at 5252.0 – 5326.0/ESM, 38,917 – 39,055/DJIA & 18,321 – 18,506/NQM…

By spiking to a slight new inter-week high (above last week’s high), the DJTA has also initially validated a ~6-week high-high-(high) Cycle Progression that could trigger a ~6-week decline (into June 17 – 21, ’24) if confirmed.

That potential decline would also validate some Golden-Ratio timing relationships developing in the DJTA – including a 1.618/1 high-high-low sequence.

In the short-term, the DJTA will be closely monitored as a potential ‘canary in the coal mine’ if it shows signs of reversing lower before other indexes.  It has produced multi-week/intra-month lows on the 17th – 20th of the month in the past 4 months (and a high in Dec ’23) and could see another decline into May 17/20th.

1 – 3 month & 3 – 6 month traders could have exited a portion of long positions in March, anticipating a sell-off that could stretch into late-May or even mid-June 2024.”  


Stock Indexes have rallied since fulfilling multi-week sell signals that projected a sharp decline into April 19th… the completion of Natural Year 2024/25’s ‘Opening Range’ and the ideal time for a multi-week or multi-month low.  That now becomes pivotal support for all the indexes in the months to come.  Divergent lows are expected in late-May and mid-June before new advances take hold.

The stronger NQ-100 remains positive (see related 17-Year Cycle analysis and what that could mean for July & October 2024) and could/should adhere to the general intra-year parallel to 2007 (successive highs in 1Q, July, and then October ’24… similar to 2007).  The DJTA is leading this ‘a-b-c’ correction and could stretch a low into mid-June ’24 before setting a multi-month bottom – in line with a powerful convergence of cycle lows in that index.

 

How Do Late-May & Mid-June ’24 Cycle Lows Influence 2024 Outlook?

How Does This Correspond to 17-Year Cycle of Stock Peaks & Declines?

Could This Ultimately Lead into the 2025/26 Recession Cycle?

 

Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.