Stocks Confirm New Intermediate Decline… DJ Transports Validate Weekly Sell Signal. NFLX Fulfilling Sept. 9 Sell Signal (‘Canary in Coal Mine’).
09/25/19 Weekly Re-Lay Alert – Precursors, Proxies & Parallels: “Stock Indices have provided more fulfillments, and future clues, regarding their near-term and intermediate outlooks. They continue to follow the parallel to 2015, in which a sharp July/August decline – bottoming in late-August – led to a strong rebound into mid-Sept.
In 3Q ’19, the indexes also fulfilled another parallel – to 2Q ’19…
In May/June ‘19, the DJIA sold off for 22 trading days, losing about 2,000 points before encountering intermediate support and bottoming.
In July/Aug ‘19, the DJIA sold off for 22 trading days, losing about 2,000 points before encountering intermediate support and bottoming.
They have also closely adhered to expectations concerning an important precursor index – the DJTA – and proxy stock (NFLX).
The Transports are in a different trend structure than the DJIA, ESZ or NQZ and were projected to peak near decisive resistance (11,000 – 11,150/DJTA) during the Sept. 13/16 cycle peak.
They did that while twice neutralizing their prevailing weekly downtrend – providing the ideal setup for an intermediate peak and a textbook weekly trend sell signal.
As a result, the Transports are projecting a likely drop back to their late-Aug. low. The Transports closed the week back below their descending weekly 21 High MAC, increasing the likelihood for a decline to that previous late-Aug. low. They turned their daily trend down, confirming that peak while ushering in the time for a multi-day bounce (now).
On Sept. 24, the S+P 500 also turned its daily trend down – ushering in the time for a likely 1 – 3 day reactive bounce on – beginning on Sept. 25. At the same time, the DJIA & NQZ twice neutralized their daily uptrends and then reversed back up…
The DJTA appears to concur… The Transports have been trading in a fairly consistent 15 calendar-day/11 trading-day cycle since May ’19. It has occasionally contracted to 13 calendar days (once) and expanded to 16 calendar days (once) but finds its equilibrium at 15 calendar days.
That has created a 15-day high (July 1) – high (July 16) – high (July 31) – low (Aug. 15) – low (Aug. 28) – high (Sept. 13) Cycle Sequence… In the ideal scenario, the DJIA and NQZ would [reserved for subscribers].
Getting back to that uncanny proxy stock, NFLX again provided advance warning of a reversal lower when it fulfilled analysis for a rebound peak on Sept. 6 – 13 and triggered another 1 – 3 week sell signal. It peaked on Sept. 9 – perpetuating a 9 – 10 week cycle that has timed most of its important swing points.
All of these factors were summarized three+ weeks ago, in the following Aug. 31, 2019 Weekly Re-Lay analysis, and have now reached fruition…
8-31-19 – Stock Indices fulfilled analysis for a sharp plunge in late-July – late-Aug. ‘19 while also fulfilling daily cycles and daily sell signals that projected a low on Aug. 26/27. Aug. 26 completed another precise 12-week move – from the June 3 low (which took hold exactly 12 weeks/84 days from the March 11 low).
The parallels to Aug. 2015 (4-Year Cycle) were reinforced this past week… and line up closely with current analysis that is based on other factors…
In 2015, primary indexes peaked on July 16 and began a ~40-day sell-off.
In 2019, primary indexes (DJIA, NYA) peaked on July 16 and began a ~40-day sell-off.
In 2015, that decline accelerated in Aug. and bottomed on the Monday of the final week of Aug. (Aug. 24).
In 2019, that decline accelerated in Aug. and bottomed on the Monday of the final week of Aug. (Aug. 26) – along with daily cycles.
Looking ahead… In 2015, that Aug. 24 low led to a rebound into mid-Sept. before a sizeable sell-off.
In 2019, the Aug. 26/27 was projected to trigger a rebound into early-to-mid-Sept. before a new sell-off. That would closely follow – or possibly move in sync with – related cycles in NFLX…
A peak on Sept. 6 – 13 would fulfill a 9 – 10 week low-high-high-high-(high) Cycle Progression, a related 67-day high (Feb. 25) – high (May 3) – high (July 9) – high (Sept. 13, ‘19) Cycle Progression, a 50% rebound in time and an over-arching 18 – 19 week high (7/21/17) – low (12/01/17) – low (4/06/18) – low (8/17/18) – low (12/28/18) – high (5/03/19) – high (Sept. 3 – 13, ‘19) Cycle Progression.
As already discussed, that closely overlaps cycles in key indexes that converge on Sept. 13/16.”
NFLX did exactly that, peaking on Sept. 9 and then plunging another ~16% since then. This remains part of a larger-degree decline – since July ’18 – with a multi-year downside target of ~xxx/NFLX.”
Stock indexes confirm intermediate reversals lower. Sept. 24 action projects 1 – 3 day bounce into Sept. 26/27, before next leg down. DJ Transports agree after triggering weekly sell signal in mid-Sept. and projecting new wave down. NFLX remains ‘canary in coal mine’ – projecting new leg down from its Sept. 9 peak and sell signal. (NFLX overall downside target remains MUCH lower!) Sept. 27/30 action could have powerful ramifications on outlook for 4Q ’19!
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.