Stocks Reinforce Pivotal Support at April 19th Lows!

05/01/24 – “Equities fulfilled projections for initial declines during the Month of Aggression – the first ‘month’ of the new Natural Year, from March 20/21st into April 19th (Date of Aggression).  They bottomed precisely on April 19th, fulfilling a host of downside timing & price projections.

That 3 – 4 week decline reinforced the projected multi-month peaks and fulfilled initial expectations from late-March reversals & sell signals…

 

Multi-Year Cycle Progressions

The most frequently-discussed multi-year cycle involves a 50 – 51-month low (Oct 2011) – low (Jan 2016) – low (March 2020) – (low; May/June 2024Cycle Progression that recurs in this time period.

In essence, it is a ~4.25-Year Cycle that has governed stocks for decades.  It should be no surprise that is half of an ~8.5-Year Cycle… that is half of the over-arching uncanny ~17-Year Cycle.  So, there is a solid relationship with that uncanny cycle.

The dovetails with what had been discussed in regard to the DJTA & DJIA in recent months.  The first part of that was the discussion of how the DJTA usually leads downturns in the overall equity market, often by a couple months or more.

Intertwined with that discussion was the focus on February 9th – the completion of the first 40 days of the new year – a kind of testing or proving ground for markets when they often reveal important clues about what should follow.  It is a cycle of ‘preparation’.

[The subsequent 40-day period culminated on March 20/21st – when more significant turning points were forecast – linked to events surrounding February 9th.]

That topic was detailed in the January 31, 2024 Weekly Re-Lay Alert – “The Initial Period of ‘Testing’ (Preparation)”, setting the stage for the DJTA to peak around February 9th and begin to lead a topping process in the overall market.

As also discussed in the excerpt on page 2, that was projected to usher in a (higher) bottoming process in Gold & Silver and lead to accelerated advances beginning in late-February… and lasting into mid-April.

A second phase of that downward reversing process was projected to take hold on/after March 20/21st, 2024.

As it turned out, the DJTA set its highest daily close on February 9, 2024… precisely fulfilling that analysis. 

It spiked to a higher intraday high on the following day (Feb 12th) and immediately reversed lower.

40 days later – on March 20 – 23rd, most other indexes were peaking and preparing to join the DJTA in a projected sell-off into April 19th – the Date of Aggression.  The die had been cast!

The April 13, 2024 Weekly Re-Lay explained why stocks should see an accelerated spike down leading into April 19th and – in the ideal scenario – reverse their weekly trends down (a lagging & confirming indicator that often times an initial low and spurs a multi-week reactive bounce):

4-13-24 – “Stock Indices are corroborating their daily & intra-month downtrends – as well as negative daily 21 MAC signals triggered in early-April – and could see a drop into April 17 – 19, bounce into late-April, and second decline in May ‘24.  Weekly trends are key!”    – April 13, 2024 Weekly Re-Lay Alert


Fulfilling that outlook, stocks dropped sharply during the subsequent week and completed the projected blow-off decline on April 17 – 19th, setting the stage for a ‘bounce into late-April’.

On April 19th, three key indexes (S+P 500, DJTA & Russell 2000) turned their weekly trends down – further validating the overall outlook for April/May 2024.

 

If the DJIA matches the duration of its two previous (primary) declines – both lasting ~3 months/~13 weeks – it could see an overall sell-off 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.

Both of these time frames could, and are likely to be, fulfilled.  They are not necessarily in conflict.  Similar to what occurred throughout 1Q 2024 – with stocks & indexes diverging during each successive intermediate cycle high – stocks could all sell off in May and set initial lows.  After a brief (1 – 2 week??) rebound, they could decline into mid-June and potentially diverge – with some setting lower lows while others set higher lows…

In the coming week(s), one critical indicator – and support level – will be the intra-year trends. 

The leading DJTA turned its intra-year trend down on April 19th – reinforcing that a larger-magnitude decline was only beginning to unfold.

It would take weekly closes below 37,122/DJIA4754/ESM16,541/NQM1925/QRM & 2677/IDX to turn the intra-year trends down and confirm a higher magnitude peak (and sell-off) in these other indexes.  Until that occurs, those levels are viewed as critical – and decisive – support.”  


Stock Indexes fulfilled multi-week sell signals that projected a sharp decline into April 19th… the completion of Natural Year 2024/25’s ‘Opening Range’.  That now becomes pivotal support for all the indexes.  They remained in intra-year uptrends through this decline but are still likely – at least in some indexes – to spike down to lower lows in May/June before a bottom is set.

Other indexes are likely to set higher lows during these future cycle lows.  The stronger NQ-100 remains positive (see related 17-Year Cycle analysis and what that could mean for 3Q/4Q 2024) and could/should adhere to the general intra-year parallel to 2007 (highs in 1Q, July, and then October ’24… similar to 2007).

 

How Does The Drop into ~April 19th Impact the Rest of the Natural Year?

How Does This Correspond to 17-Year Cycle of Stock Declines (and Related Analysis for 4Q ’24)?

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.