Why the 2-Year Cycle & Weekly Trends Project Rally From Oct. 26/29 Cycle Low.
Why the 2-Year Cycle & Weekly Trends Project Rally From Oct. 26/29 Cycle Low.
10/27/18 Weekly Re-Lay: “Stock Indices plunged into Oct. 26, fulfilling the majority of the overall 2-Year Cycle and ultimately turning the weekly trends down. That has been the primary objective for this sell-off and its fulfillment is likely to trigger an initial low and 1 – 3 week bounce.
At the same time, it generates a more convincing sign of a 3 – 6 month peak (set in Sept./Oct.) and reinforces expectations for late-2018/early-2019…
Stock Indices produced multiple signals of confirmation (on a 1 – 3 month basis) and potential culmination (on a 2 – 4 week basis). They have completed a textbook sequence of signals since late-September. That began with the DJIA spiking to new all-time highs, fulfilling its weekly trend pattern that had been in effect since February.
That set the stage for the onset of an uncanny 2-Year Cycle that has generated sharp 3 – 6 week declines in Sept./Oct. every two years since 2012 and in 6 of the preceding 10 years. They triggered 1 – 4 week sell signals in the opening days of Oct. ‘18, including NQZ short positions up to 7690.
Those sell signals were quickly validated with outside-week/2 Close Reversal sell signals on Oct. 5 – projecting 2 – 3 weeks of substantial selling.
8 – 10% declines were anticipated during the first two weeks of Oct. with overall declines that could stretch into late-Oct. and compare to similar sell-offs in Jan./Feb. ‘18, Dec. ‘15/Jan. ’16 & July/Aug. ‘15 (2500 – 3300/DJIA points, or 12.5 – 16% declines).
Stocks fulfilled the 1 – 2 week objective & signaled an initial low on Oct. 11, followed by a sharp rebound into Oct. 16/17. The NQZ again led, bouncing into Oct. 17 and testing weekly resistance and its descending daily 21 Low MAC – ushering in the time for a second drop. The primary overriding objective was to see the weekly trends turn down.
The Oct. 17 cycle & signals were expected to spur an 8 – 11-day decline – placing focus on Oct. 25 – 26 for a short-term low. Reinforcing that potential, Oct. 26 was the earliest the weekly trends could turn down – a signal that often coincides with an initial low. All three turned their weekly trends down on Oct. 26, a signal that has a strong influence on the 3 – 6 month outlook (Nov. ’18 IT will update).
Stock indices have fulfilled almost all the downside potential for October, increasing the chance for a reversal higher in the coming days and a rally into Nov. 2 – 9 – that would perpetuate a ~5-week high-high-high-high & a 10 – 11-week low-high-high-(high) Cycle Progression in the NQ-100.” TRADING INVOLVES SUBSTANTIAL RISK!
Equities are completing the projected 2-Year Cycle (October 2018) plunge and are increasing the likelihood for a decisive low on Oct. 26 or Oct. 29 (watch extreme downside targets at 23,913/DJIA, 2590/ESZ &6650/NQZ) followed by an initial surge into Nov. 2 – 9. The weekly trend pattern has corroborated that and ushered in the potential for a 1 – 3 week reactive bounce beginning on Oct. 29.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.