August 26 – 28 Cycle Low Validated. Stocks Project (Minimum) 2 – 4 Day Rally While Fulfilling Weekly Cycle Lows. NFLX Concurs
08/28/19 Weekly Re-Lay Alert – NFLX & Range-Trading Targets: “Stock Indices have nearly completed the time frame when a sharp plunge was forecast – in late-July – late-Aug. ’19. As detailed numerous times over the past couple months, a multi-week bottom was projected to take hold on Aug. 19 – 30, the latest phase of an 11 – 12 week high (Oct. ’18) – low (Dec ’18) – low (Mar ’19) – low (Jun ’19) – (low; Aug 19 – 30) Cycle Progression.
When these indexes triggered another 3 – 5 day sell signal – on the Aug. 21 close – it reinforced that outlook and focused on Aug. 26 – 28 for a potential bottom. Corroborating that, once again, was an important ‘proxy stock’ – NFLX.
Much like the DJIA and its recent range-trading sequence (27,400 – 25,400 – 26,400 – 25,400 – 26,400…), NFLX had also been confined to a specific range through most of 2019 – roughly between 335 – 385. On the second week of 2019, NFLX closed above 335.0 and never closed back below it until July 19, following its July 11/12 sell signal. That projected a drop to ~285.0 – a doubling of the range.
From a cycle perspective, NFLX was projecting a drop into Aug. 22/23 with the majority of daily & weekly cycles bottoming on Aug. 22 – 29. NFLX plunged into mid-Aug., initially bottoming at 288.0. It then retested that low and spiked to 287.2 on Aug. 27.
For all intents and purposes, it fulfilled price and timing objectives.
Meanwhile, most other indexes declined into Aug. 26/27, with the Transports and Russell 2000 spiking to their lowest lows since mid-Jan. Others – like the DJIA, S+P 500 and Nasdaq 100 – continue to hold their Aug. 5/6 lows and validate the argument that this is only an intermediate correction (so far).
That reinforces what has been emphasized since the drop into Aug. 5/6: Stock Indexes have experienced a normal (moderate) correction but must close below those Aug. 5/6 lows – and also turn their weekly trends down – in order to elevate this to a higher magnitude decline.
As of Aug. 23, all of the primary stock indexes have generated multiple neutral signals against their prevailing weekly uptrends but have not turned those trends down. It would take weekly closes below 25,440/DJIA,2775/ESU & 7224/NQU to reverse those trends to down and confirm that multi-month peaks are in place.
Until that occurs, they are capable of (eventually) making their way back to the highs.
Wave comparisons reveal the same thing:
In May/June, the DJIA sold off for 22 trading days, losing about 2,000 points before encountering intermediate support.
In July/Aug, the DJIA sold off for 22 trading days, losing about 2,000 points before encountering intermediate support.
The DJIA would need to drop to new lows to signal a larger-magnitude decline. Until that occurs, it is a basic ‘correction = correction’ wave equivalence.”
Stock markets fulfilling daily & weekly cycle lows, most synergistic on Aug. 26 – 28; create positive divergence at lows. ~12-Week Cycle Progression in stock indexes focused on Aug. 26 – 28 for multi-week low. How far could stocks rally? When is next intermediate peak expected??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.