Can Stocks Fulfill Rally into Jan. 9? Will Surge Reach Upside Targets & Confirm Bottom??
Can Stocks Fulfill Rally into Jan. 9? Will Surge Reach Upside Targets & Confirm Bottom??
01/05/19 Weekly Re-Lay – “Stock Indices rallied sharply after reaching 2 – 3 month (6200/NQ) and 6 – 12 month (22,100/DJIA) downside targets as daily & weekly cycles in the S+P 500 bottomed on Dec. 24 – 28. These factors projected a larger-degree rally from that late-Dec. low into Jan. 7 – 11. Another quick surge could have the indexes attacking their 2 – 3 week upside targets in the coming days…
Stock Indices have surged since bottoming on Dec. 26 while fulfilling daily cycles, a 14-week high-high-high-low (Dec. 24 – 28) Cycle Progression and a related 7-week high (Sept. 17 – 21) – high (Nov. 5 – 9) – low (Dec. 24 – 28) Cycle Progression. That low also had the DJIA testing its 2018 downside target (22,100) while the Nasdaq 100 reached its 4Q 2018 downside target (6200/NQ).
From a bigger-picture perspective, the most telling aspect of that overall December decline was the monthly trend – that turned down in most indexes on Dec. 31. That is a lagging/confirming indicator that often times the low of an initial decline. So, many factors were corroborating expectations for a low.
In addition, price action was projecting a rally – from Dec. 26/27 into Jan. 7 – 11 – the latest phase of an overlapping, 14-week low-low-high-(high) Cycle Progression in the DJIA. Multiple factors were indicating that the late-Dec. low should be of a higher magnitude than any previous low seen in 4Q 2018. That means it should trigger a larger-degree advance than any previous one seen in 4Q 2018.
Two confirmations of that would arrive if/when these rebounds exceed the price magnitude of previous rallies and last longer than the longest rebound of the past three months. The longest rally was 8 trading days, which would be exceeded by new rebound highs on Jan. 9 or any day after that.
The ESH futures have already exceeded their previous price rallies while the DJIA & NQH would need to reach the already-discussed upside targets to do the same (see below)…
Stock indexes turned their daily trends up, confirming the Dec. 26 lows and projecting a 1 – 3 day pullback followed by a second rally into Jan. 7 – 11. They pulled back for two days and then entered a second rally on Jan. 4.
That was/is projected to reach the late-Oct. lows and corroborating resistance that includes pairs of weekly LHR levels (24,295 – 24,366/DJIA, 2637- 2646/ESH & 6752 – 6774/NQH). In each case, those levels also represent the 50% rebound levels – recovering half of what was lost in 4Q 2018.”
Stocks are confirming 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. The Dec. 26/27 lows 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.