Why the 2-Year Cycle (& 90/10 Rule) Projects an October Plunge in Stocks.
Why the 2-Year Cycle (& 90/10 Rule) Projects an October Plunge in Stocks.
10/03/18 Weekly Re-Lay Alert: “As stock indexes move through this precarious period (Sept/Oct. when a consistent 2-Year Cycle portends a 5 – 10% sell-off), focus begins to turn to the intra-month trend structure for October – in all markets – and what that reveals about the next couple weeks.
In 2012, 2014 & 2016 (as well as in 2008), equity markets peaked in early-to-mid-Sept. and then corrected for 4 – 6 weeks. In each case, those declines overlapped the first 3 weeks of October. (They also experienced related 3-week sell-offs from mid-Sept. into early-Oct. – in 2011 and 2013.)
This 2-Year Cycle has consistently timed sharp corrections that usually see their accelerated phase at some point in Oct. The potential for an Oct. sell-off is corroborated by the Russell 2000, which just turned its weekly trend down, and the NYA & DJTA (daily indicators).
And, since the markets are now entering the final 10% of their expected low – low cycle (late-March – late-Oct. 2018), it is the time that is most prone to an accelerated decline IF one is going to take hold.
The intra-month trends could be the first trigger, if the indexes can give daily closes below 26,596/DJIA, 2917.5/ESZ & 7630/NQZ.
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The 2-Year Cycle is projecting a sharp (10 – 15%) sell-off in October that is expected to usher in an important (1 – 3 month) low in late-October – in sync with cycles that have been discussed throughout 2018. The October intra-month trends could soon corroborate.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.