August ’19 Stock Plunge XI: Daily Trend Signals Concur – New Sell-off Should Begin Tomorrow – Aug. 14!!! What is expected from Aug. 14 – 30??
08/13/19 INSIIDE Track Stock Index Update – “Stock Indices remain in a corrective phase, expected to last from mid-to-late-July into (at least) late-August. On an intermediate basis, the focus remains on the period between Aug. 19 – Aug. 26 for clarification and/or confirmation of a larger-magnitude reversal.
The most important factor is the weekly trends. The Indexes generated a second set of neutral signals against their prevailing weekly uptrends on Aug. 12, the same week that equities attacked weekly downside extreme targets (HLS levels at 2797/ESU & 7249/NQU).
It would now take weekly closes below xx,xxx/DJIA, xxxx/ESU & xxxx/NQU to reverse those trends to down and confirm that multi-month peaks are in place….
The other reason that next week is so critical is the action of the weekly 21 MACs and 21 MARCs…
In late-July, Stock indices entered a 6 – 8-week period when the inversely-correlated weekly 21 MARC would surge – increasing the potential for the weekly 21 MAC to flatten and turn down – exerting negative pressure on price action. That is the optimum setup for a substantial sell-off. The first part of that was a two-week surge (21 MARC) that precisely correlated to the two-week drop in prices – into Aug. 5.
The second phase begins next week – as soon as Aug. 16 – and will also usher in the time when the corresponding weekly 21 MAC has the best chance for turning down. In between, the period from Aug. 5 – Aug. 15, is the time when intervening consolidation was/is most likely – with the markets whipping back and forth. That remains the case and maintains focus on the impending two-week period (Aug. 16 – 30) as the second vulnerable period for stocks.
During this intervening period, three indicators were expected to help pinpoint a rebound peak. The first was a test of daily LHRs, which usually precedes a top by 1 – 3 days. That took place last week.
The second was a test of the descending daily 21 Low MACs.
As also explained in the Aug. 10, 2019 Weekly Re-Lay:
“If they can test their daily 21 Low MACs on Aug. 12 (~26,695/DJIA, 2944.0/ESU & 7749/NQU), the stage would be set for a reversal lower and the onset of a new decline. Daily trend patterns identify Aug. 12/13 as pivotal.”
The S+P 500 and Nasdaq 100 tested those levels today…
The third factor, alluded to in that same excerpt, is the daily trend patterns.
The ideal scenario for a rebound peak is to see the indexes rally and twice neutralize their daily downtrends BUT fail to reverse those trends up. Both the DJIA & NQU have twice neutralized their daily downtrends, ushering in the time (tomorrow) when a reversal lower is most likely…
Weekly resistance levels (reprinted above, from the 8/10/19 Weekly Re-Lay) are the ideal levels for intra-week highs – often tested mid-week when creating an Intra-Week Inverted V Reversal – during consolidation phases. Look for more volatility in the near-term as equities prepare for a second sell-off in August.”
Stock markets increasing likelihood for second sharp sell-off after Aug. 12/13. Daily trend patterns & daily 21 MACs pinpoint tomorrow – Aug. 14 – as time for new decline to take hold! 40-Year Cycle AND 4-Year Cycleproject Aug. ’15-style sell-off. What does this reveal about Sept. – Dec. 2019?? And 2020???
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.