Stock Market 17-Year Cycle in Force; Mid-June ’24 Lows & July ’24 Highs Would Corroborate.
06/05/24 – “Stock Indices are continuing their divergence – as part of the overall outlook for the return of the 17-Year Cycle of Stock Market Declines in 2024/2025 – with the Russell 2000 and DJTA remaining in multi-month corrective phases as the NQ-100 remains strong…
At the same time, Crude Oil and the products (Unleaded Gas & Heating Oil) have been selling off – in line with 2Q 2024 expectations. One question is whether the latter will have an impact on the former… reinforcing the ‘Energy/Equity Connection’.
That has been a recurring topic of discussion over the past 5 – 7 years – the ‘loose’ correlation between moves in the energy sector and related/similar moves in the equity markets. From a general standpoint, both market complexes reflect the perceived status of the economy – with consumers pouring more money into both when things are good (and retrenching when things are not).
A couple of 2018 excerpts are reprinted on page 2, explaining that this is not a precise link and usually has significant periods of divergence – when one has already completed a move and the other has not. However, it should still be monitored… particularly if energy markets break through critical support and/or accelerate lower – in line with the Axiom of Market Correlations (page 3).
Stock Indices are expected to see new sell-offs into June 17 – 28th (June 18 – 20th = most synergistic) but the new intra-month trends could be the determining factor. The NQ-100 rallied to new highs, fulfilling its daily trend pattern, as the DJTA reversed lower on June 1st – in sync with its daily 21 Low AND 40 Low MACs (15,246 & 15,247 on May 31st).
The DJTA’s latest high reinforces the focus on the week of June 17 – 21st (strongest focus now pivoting slightly to June 20th) as the ideal time for an initial culmination in selling for the Transportation Index. The Russell 2000 and S+P Midcap 400 are set up in a similar fashion and could exert a bearish influence on the stronger indexes leading into that cycle low.”
Stock Indexes fulfilled the outlook for a new decline in the second half of May 2024 with the S+P 500 & NQ-100 dropping to extreme downside targets without turning their weekly trends down. The DJIA was similar and would not turn negative until a weekly close below 38,000/DJIA. The NQ-100 is reinforcing expectations for similarities to 2007, in line with the 17-Year Cycle of Stock Market Peaks (successive highs in 1Q ‘24, July ‘24, and then October ’24 projected).
The DJTA & Russell 2000 maintain the likelihood for additional lows in ~mid-June – the time when a multi-month bottom is most likely and when this overall corrective period should culminate… leading to new rallies into July ‘24. The DJTA is focused on June 17 – 21st for a bottom. The Russell 2000 concurs – with a decisive low expected on ~June 19/20th.
Why is Mid-June ’24 Cycle Low the Key to 3Q/4Q ’24 Outlook?
How Does This Reinforce 17-Year Cycle of Stock Peaks Forecast for July & October 2024?
Will This Corroborate the Projected 2025/26 Recession (& Staglfation) Cycle?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.