Why the 2-Year Cycle (& NYSE) Projects an October Plunge in Stocks.
Why the 2-Year Cycle (& NYSE) Projects an October Plunge in Stocks.
10/06/18 Weekly Re-Lay: “Stock Indices have initially validated the potential for an October correction, in line with a consistent 2-Year Cycle and following the DJIA’s fulfillment of its weekly trend pattern. The Nasdaq 100 – and several related, key tech stocks – remain below the late-August peaks after the daily trend pattern allowed for a retest of that high before a ‘c’ wave decline took hold.
They are close to signaling a more accelerated decline…
Stock Indices have sold off after the DJIA spiked to new highs, fulfilling 6-week & 12-week Cycle Progressions and its weekly trend pattern ushering in the most likely time for a quick sharp sell-off. That corroborated the cyclic outlook for a likely sell-off in early-Oct. – in sync with an uncanny 2-Year Cycle.
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 (with related 3-week sell-offs in 2011 and 2013).
In almost every case, the first two weeks of Oct. contained a significant portion of that sell-off. The potential for an early-Oct. sell-off was corroborated by the Russell 2000 (weekly downtrend) and the NYA & DJTA (daily indicators)…
Stock indices briefly spiked to new highs, with the Nasdaq 100 perpetuating a ~30-degree/21 – 23 trading-day low-low-low-low-high-(high) Cycle Progression (that could produce a subsequent 2 – 4 week high in early-Nov.) as it peaked on Oct. 1. That set the stage for Oct. 3 – 17, the danger period when a sharp decline was/is most likely.
The NYA, which has led the latest reversal, rebounded right to its weekly resistance, daily trend point and daily LHR (on 10/03) while maintaining its daily downtrend. That reinforced the potential for a sharp decline to immediately follow. The primary indexes have given multiple neutral signals but need daily closes below 26,349/DJIA, 2887/ESZ & 7347/ NQZ to turn the daily trends down and confirm.
1 – 4 week traders could have sold Dec. mini-Nasdaq 100 futures up to 7690 and be holding these short positions w/avg. open gains of about $5,000/ contract. Move buy stops to [reserved for subscribers].” TRADING INVOLVES SUBSTANTIAL RISK!
Equities are initially validating the 2-Year Cycle projections for 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 Russell 2000, NYSE & DJ Transports have led the reversal lower.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.