Stocks Reinforce May 17 – 20 Cycle High; Project Drop into Mid-June Cycle Low.
05/22/24 – “Stock Indices have (again) diverged after rallying into May 15th and attacking monthly resistance levels while fulfilling intra-month uptrend projections. A couple indexes have spiked to new highs – fulfilling their positive weekly trend patterns – while others (those that normally lead downward reversals in the overall market) set lower highs and are signaling new declines.
That divergence is typical of a ‘b’ wave high since a new impulse wave would have all or most stocks and indices rallying to new highs. In the case of the S+P 500, it (initially) held what it needed to on the May 17th weekly close and would reinforce that if it closed below 5327/ESM on the May 24th weekly close.
Most indexes remain focused on June 17 – 28th for the next multi-month low and the likely completion of an overall (~3-month) ‘a-b-c’ correction.
The DJTA reinforced that with its May 14th high. If it now declines for ~34 days/~5 weeks (the duration of its ~April decline), it would bottom around June 17/18th – coinciding with a ~30-degree/~1-month cycle timing lows on Jan 17, Feb 20, March 18/19 and April 17/18th.
That index has already dropped back to its January 2024 lows and would set new intra-year lows if it dropped below 14,795/DJTA in the coming week(s)…
From a timing perspective, no index had greater synergy of multi-month cycles converging in mid-May 2024 than the Russell 2000…
The Russell 2000 rallied into the latest phase of a ~1.5-month high-high cycle that had timed multi-week highs in late-Sept, mid-Nov. & late-Dec. ‘23 and then mid-Feb & late-March ’24… and projected a subsequent high in mid-May 2024.
The Russell 2000 rallied into mid-month (and mid-week), testing its weekly resistance (2122 – 2139/QRM) and a myriad of daily upside targets (2120 – 2132/QRM) that included three daily LHRs.
The May 15th high also perpetuated a ~9-month/40 – 41-week high (Jan ’22) – low (Oct 10-14 ’22) – high (July/ Aug ’23) – (high; May 6 – 17, 2024) Cycle Sequence.
At the same time, the Russell 2000 fulfilled a corresponding (midpoint cycle) 20 – 21-week high (Jan ’22) – high (May ’22) – low (Oct 10-14 ’22) – low (March ’23) – high (July/Aug ’23) – high (Dec ’23) – (high; May 10 – 17, 2024) Cycle Sequence.
For most of the past ~4.5 months, the Russell 2000 has traded inside the range it set during a ~3-week sell-off on December 27th – January 17th. On May 15th, it closed at the high end/upper extreme of that range and has since sold off…
On a short-term basis, the DJIA, DJTA, Russell 2000 & S+P Midcap 400 have declined since their May 14/15th highs and could accelerate lower into May 24th. If so, that would just be the first (of 2 or 3) 1 – 2 week declines from the mid-May peak. However, the Russell 2000 must give a daily close below 2050/QRM to confirm a multi-week peak is forming.
All of this remains in the context of the 2024 outlook for a multi-month high in 1Q ’24, a multi-month low by/in June ’24, and a larger-magnitude peak in the second half of 2024… ushering in the 17-Year Cycle of Stock Market Declines leading into 2025.
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/past mid-June 2024.” TRADING INVOLVES SUBSTANTIAL RISK!
Stock Indexes are retesting intra-year highs and poised for a new decline in the second half of May 2024. Divergent lows are expected in late-May and mid-June – the time when a multi-month bottom is most likely in most indexes – before rallies into July ‘24. June 17 – 21st (- 28th) is the ideal time (time with greatest synergy of corroborating cycles & timing indicators) for the end of this corrective period and the onset of new rallies.
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 increasing the potential for a multi-month low in mid-June ’24 (June 17/18th = greatest synergy of cycles for a bottom) – in line with a powerful convergence of cycle lows in that index.
How Long Could Mid-June ’24 Cycle Low Hold?
Does This Align With 17-Year Cycle of Stock Peaks Forecast for July & October 2024?
Does This Corroborate the Projected 2025/26 Recession Cycle?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.