Energy/Equity Connection II: Are Bull Markets Vulnerable in Oct. 2018?
Energy/Equity Connection II: Are Bull Markets Vulnerable in Oct. 2018?
08/29/18 Weekly Re-Lay Alert – The Energy/Equity Connection – II: “Stock Indices continue to move progressively higher (as do energy markets; see 8/22/18 Alert for related details on this ongoing correlation) after fulfilling the potential for a 3 – 6 month or longer bottom in March 2018. The other decisive low of 2018 is expected in Oct. 2018….
That could be as brief as a 2 – 3-week sell-off, similar to declines in mid-Mar. – late-Mar. ’18, late-Jan./early-Feb. ’18, Jan. ’16 and Aug. ’15, so the continuing uptrends do not yet violate that anticipated cycle low. In contrast, the current action reinforces the similarity to those other cycle lows and leaves open the potential for another example of the 90/10 Rule of Cycles (where most of move is at end of cycle).
Based on the weekly trend patterns, most indexes have projected a rally back toward the early-Jan. highs after failing to turn those weekly trends down during the decline into early-Feb. and/or the subsequent decline into late-March…
That is mentioned from a slightly broader or more general standpoint. It is not advisable to attempt trading equities off energy cycles & signals – or vice-versa – but the outlook for energy markets is a corroborating factor signaling an approaching peak as stock indexes fulfill upside price targets (based on the weekly trend pattern) and complete weekly cycles.”
Crude Oil and the Energy complex are nearing the culmination of projected ~12-month uptrends stemming from late-Sept. 2017 cycles. They fulfilled the outlook for an intermediate low in mid-Aug. and are expected to rally to new 2018 highs and fulfill the overall outlook for 2018. Equity markets are showing similar potential – projecting a peak in the coming weeks (once one more index fulfills its weekly trend pattern and reaches new 2018 highs) and then a sharp drop in Oct. 2018.
Crude is still expected to set its final intra-year high during 3Q ’18 and set the stage for a substantial sell-off in the months that follow. A final high would complete in the coming weeks would fulfill multiple weekly cycles as well as a ~16-month low-low-(high) Cycle Progression while fulfilling a ~5-year high-high-(high) Cycle Progression and a ~10-year low-low-high-(high) Cycle Progression – all of which converge in/around ~Sept. 2018. This market action continues to coincide with Middle East cycles that project a culmination of a major transition period in late-Sept. ’18.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.