DJIA Rally Waning; NQ-100 Poised to Test ~7300.
DJIA Rally Waning; NQ-100 Poised to Test ~7300.
06/06/18 Weekly Re-Lay Alert – Overriding Cycles: Stock Indices have steadily moved higher since their early-April lows but remain in congestion with the next multi-month peak expected in late-June/early-July. The Nasdaq 100 has just fulfilled its related, primary objective by retesting its intra-year high.
A peak in the coming weeks would fulfill the latest phase of the ~5-month low-low-low-low-high-(high) Cycle Progression that timed the late-Jan. high and that – along with an overlapping ~10-month low-low-low-low-high-(high) Cycle Progression – projects a subsequent high in late-Nov./early-Dec. 2018.
As equity markets draw nearer to their late-June (5-month) cycle high, some shorter-term cycles are losing their influence – yielding to intermediate cycles as the respective rebounds gain a little more traction.
One example involved the potential for the DJIA to see one more quick sell-off before resuming its advance. It was expected to pull back into June 4 – 6 before seeing its next rally. That did not pan out.
The DJIA could only trade sideways (even as the DJTA & DJUA sold off) before remaining downward (cyclic) pressure matured and the intermediate uptrend regained control. The DJIA re-entered its daily uptrend on June 4 as it closed above its ascending daily 21 MAC – two signs of a resuming daily uptrend.
Today’s accelerated advance – turning the intra-month trends up in all three indexes – corroborated that and reinforced the outlook for more upside into the second half of June. At the very least, that signal should spur rallies into mid-June and/or to monthly resistance levels.
From the opposite perspective, the Nasdaq 100 is… turning focus to a higher magnitude of cycles.
That is why price action is so important and is the ultimate deciding factor. The NQ has remained positive and in lead of the other indexes – reinforced by the action of its daily 21 MAC.
The NQM repeatedly tested and held above the weekly 21 High MAC – during successive pullbacks – before accelerating away from that channel during the past week.
It is now retesting its all-time high as the DJIA & S+P 500 continue to lag. To put it into perspective, tomorrow (June 7) is the point at which the DJIA will have rebounded from its April 2 low for the same amount of time (66 days) that it declined into that low.
While matching the duration of the preceding decline, however, the DJIA has only rebounded (in price) about 55% of that previous decline. On a ‘relative strength’ basis, or a price/time-squaring basis, that is not particularly positive.
The DJIA is also nearing weekly 21 MAC resistance – at 25,225 – 25,235/DJIA – as that channel continues to roll over and turn down. It would take a weekly close above 25,225/DJIA to neutralize the negative influence of that channel.
For now, all three indexes are in intermediate uptrends that would not turn neutral until [reserved for subscribers].”
The Nasdaq 100 is reinforcing its May 23 buy signal that should ultimately create a rally back to its all-time high – with diverse targets just above 7300/NQU. The DJIA is nearing related upside targets (~25,300) and is expected to peak well below its 2018 high. Tech stocks are leading this advance and are expected to ultimately usher in a multi-month cycle peak and reversal lower – ideally on June 19 – 29. See Weekly Re-Lay & INSIIDE Track for additional details and/or related trading strategies.