Why the 2-Year Cycle (& Weekly Trends) Project Add’l Equity Plunge into Late-Oct. ‘18.
Why the 2-Year Cycle (& Weekly Trends) Project Add’l Equity Plunge into Late-Oct. ‘18.
10/20/18 Weekly Re-Lay: “Stock Indices rebounded sharply – from daily cycle lows on Oct. 11 to daily cycle highs on Oct. 17 – after plunging during the first two weeks of October. That fulfilled a consistent 2-Year Cyclethat projected 8 – 10% declines during the first half of October.
All three primary indexes are now in a position to turn the weekly trends down – and generate a more convincing sign of a 3 – 6 month peak…
Stock Indices closed mixed on the week with the Nasdaq 100 still showing the most weakness. In the interim, equities fulfilled analysis for a sharp rebound from daily cycle lows on Oct. 11 (at which time many indexes fulfilled the 2-Year Cycle outlook for a ~10% plunge in the first two weeks of October) into daily cycle highs on Oct. 16/17.
By dropping 8 – 10% during the first two weeks of October, equities have fulfilled the primary downside objective for this time frame, paralleling what was previously seen in 2008, 2012, 2014 & 2016 – the recurrence of an uncanny 2-Year Cycle. However, as previously demonstrated, some of those phases saw additional selling into late-Oct.
All three indexes have now neutralized their weekly uptrends at least two times. They need weekly closes below 24,899/DJIA, 2745/ESZ & 6907/NQZ to turn those weekly trends down (and signal that the Sept./Oct. highs are of one degree higher than the Jan. ’18 peaks). If that occurs on Oct. 26, it would usher in the time for an initial low while also projecting a subsequent (future) drop.
Critical Context: In order to get the most accurate trading indicator signals, it is helpful to view the cash indexes since they don’t have to factor in time premium or rollover distortion. In that regard, the Nasdaq 100 cash index closed for two consecutive weeks below its flattening weekly 21 MAC. The last time it did that was in Jan. & Feb. 2016.
And the last time it turned the direction of that channel down was in Jan. 2016. If it drops below 6887 in the coming week or below 7099 on Oct. 29 – Nov. 2, the NQ-100 would turn the direction of that channel down. If the NQ-100 were able to do that – and turn its weekly trend down (weekly close below 6892), it would project a drop to ~6200/NQ.
Stock indices bounced sharply to begin the week after fulfilling early-Oct. downside price targets and multi-month support levels. That allowed the NQZ to rally right to weekly resistance and its descending daily 21 Low MAC while perpetuating a 15 – 17 day low (7/30) – low (8/15) – high (8/30) – high (9/14) – high (10/01) – high (Oct. 17) Cycle Progression. A daily close below 7031/NQZ would confirm.” TRADING INVOLVES SUBSTANTIAL RISK!
Equities continue to fulfill the 2-Year Cycle and are increasing the likelihood for another 1 – 2 week sell-off – ultimately leading into important cycle lows in late-October that have been in focus for several months. The weekly trend pattern is corroborating that and ushering in the potential for an important low on Oct. 26 or 29.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.