After Fulfilling 2018 Outlook, How High/Long Can Stocks Rally? What Proxy Stock is Again Honing Analysis??
After Fulfilling 2018 Outlook, How High/Long Can Stocks Rally? What Proxy Stock is Again Honing Analysis??
01/03/19 INSIIDE Track Stock Index Update – “Stock Indices confirmed a 1 – 2 week bottom after fulfilling most of the outlook for 4Q 2018 – dropping sharply throughout December after setting a secondary (lower) high in late-Nov./early-Dec. and making it down to the primary downside target for all of 2018 (22.100/DJIA) before bouncing sharply. At the same time, the Nasdaq 100 made it down to its 4Q 2018 downside target (~6200/NQ) as global indices (Europe & China) fulfilled early-2018 projections for a year-long decline.
That low occurred during the latest phases of a 14-week high (March 5 – 9) – high (June 11 – 15) – high (Sept. 17 – 21) – low (Dec. 24 – 28) Cycle Progression and a corresponding 7-week high (Sept. 17 – 21) – high (Nov. 5 – 9) – low (Dec. 24 – 28) Cycle Progression. It also fulfilled a 16 trading-day high (Oct. 17) – high (Nov. 8) – high (Dec. 3) – low Cycle Progression that was poised to produce a low on/around Dec. 27.
Since then, the indexes turned their daily trends up as they were attacking (but remaining below) their descending daily 21 Low MACs on Jan. 2 – signaling the culmination of an initial ‘a’ wave rally. That was discussed in the Jan. 2, 2019 Weekly Re-Lay Alert and was/is likely to spur a 1 – 3 day reactive sell-off (‘b’ wave) before another rally (‘c’ wave) into Jan. 7 – 11 – when an overlapping, 14-week low-low-high-(high) Cycle Progressionrecurs in the DJIA.
That ‘b’ wave decline took hold in earnest today, with key indexes testing daily HLS levels and reinforcing that a secondary low should be seen in the coming day(s). Once tomorrow’s trading is complete, the indexes would need to give daily closes above or below that 3-day range (Jan. 2 – 4) to trigger a new intra-month trend. That should be a key factor in determining what to expect for the remainder of January… and is another reason why a secondary low could be seen in the next 1 – 2 days.”
Stocks are signaling multi-week (possibly multi-month) bottoms after reaching downside price targets for 4Q 2018 (6200/NQ) and for all of 2018 (22,100/DJIA) while fulfilling analysis for a very bearish 4Q 2018. Since early-2018, global indexes had been forecast to undergo a year-long decline into late-2018. That has been fulfilled as well.
The Dec. 26/27 lows fulfilled multiple cycles and set the stage for a multi-week bounce that should carry the DJIA, S+P & Nasdaq 100 higher into ~Jan. 9, 2019 and up to initial upside targets. That could pave the way for a second advance after mid-Jan.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.