Stocks Creating Divergence as S+P 500 & NQ-100 Reach Extreme Downside Targets; Initially Bottom.

05/31/24 – “Stock Indices are reinforcing the development of ‘c’ wave declines (in most indexes) that should last into June 17 – 28th… after peaking in mid-May and fulfilling intra-month uptrends.  The Russell 2000 & DJTA fulfilled recurring weekly cycles while setting lower highs (in mid-May)… and have been (again) leading the downward reversal.

The DJTA could decline for ~5 weeks (same duration as April decline) into June 17 – 20th – when a ~1-month cycle – timing lows on Jan 17, Feb 20, March 18/19 & April 17/18th – returns. 

The Russell 2000 is expected to decline into June 19/20th – completing a 50% retracement in time (157 days up, 79 days down) while bottoming 2 months/~60 degrees from its April 19th low.  A decline into June 19/20th would have the latest decline (since May 15th cycle high) – a dynamic ‘c’ or ‘3’ wave decline – double the duration of the ‘a’ or ‘1’ wave decline.

Price action, however, is the critical factor.

The DJIA has now twice neutralized its weekly uptrend and needs a weekly close below 38,000/DJIA to turn its weekly trend down, confirm a 1 – 2 month peak, and prevent a rally back to the highs.  If it can turn that weekly trend down, the DJIA would join other indexes in reinforcing the outlook into mid-June

The S+P 500 initially bottomed after testing and holding its weekly HLS level (weekly extreme downside target at 5213/ESM).  At the same time, the DJIA & Nasdaq-100 were also testing their weekly extreme targets (HLS).”  


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 has also preserved its weekly uptrend and would not turn negative until a weekly close below 38,000/DJIA.  The NQ-100 remains positive and 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… similar to 2007).

The DJTA & Russell 2000 maintain the likelihood for additional downside into 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 – 19th 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.