European Equities Reinforce Bearish Cycles in 4Q 2018; Bearish After Sept. ’18.
European Equities Reinforce Bearish Cycles in 4Q 2018; Bearish After Sept. ’18.
06/29/18 INSIIDE Track: The Euro STOXX 50 Index remains on track for an overall decline into late-2018 that could stretch into 1Q 2019 (see comments in corresponding inset). After testing 1 – 2 year support and fulfilling cycle analysis for a sharp drop into March ‘18 (a low that could hold for 3 – 6 months), it rebounded right to 1 – 2 month resistance and held.
Before reaching that (potential) early-2019 low, the STOXX 50 could see a multi-month high in Sept. 2018 (ideally in mid-to-late-Sept). That would be the next phase of an ~8-month high-high-high-high Cycle Progression that has timed multi-month peaks in Sept. ‘16, May ‘17 & Jan. ‘18.
Sept. 2018 should time another high – more likely lower than the Jan. 2018 peak. More recently, it rallied into May 2018, peaking 4 months (half of ~8-month cycle) from the Jan. peak. That creates a potential 4-month (16 – 17 week) high-high-high Cycle Progression also targeted at Sept. 2018.
So, a pair of monthly/weekly cycles project at least a 1 – 2 month (and likely longer) peak in Sept. 2018. The price action in between, specifically the weekly trend pattern and whether or not the March 2018 low holds, should hone the outlook for 2019. A drop into late-July would reinforce this scenario.”
European equities are dovetailing with the outlook for US Stocks and honing the outlook for 3Q 2018. The STOXX 50 (as well as DAX, FTSE, CAC, etc.) are projecting a lower peak in late-Sept. followed by a substantial decline into 1Q 2019. That corroborates the outlook for domestic equities that turn bearish in 4Q 2018 with the sharpest decline expected after a secondary peak in late-Nov./early-Dec.
See Weekly Re-Lay & INSIIDE Track for additional analysis and/or trading strategies.