Is Energy/Equity Connection Signaling Trouble Ahead?
Is Energy/Equity Connection Signaling Trouble Ahead?
10/10/18 Weekly Re-Lay Alert – Intra-month Trends and the 2-Year Cycle: “The intra-month trend pattern was expected to be a determining factor in October – projected to help trigger a sharp decline from Oct. 3… Several other factors preceded that, like an uncanny 2-Year Cycle that projected a sharp plunge in stock prices overlapping the first two weeks of October. That drop was expected to resemble the drop seen in late-Jan./early-Feb. 2018…
Stock Indices are one of the markets that are adhering to this principle, turning their intra-month trends down as soon as it was possible (Oct. 4) – while reinforcing bearish expectations for the first 2 – 3 weeks of October.
That was corroborated when all three indexes completed outside-week/2 Close Reversal sell signals on Oct. 5 – projecting acceleration to the downside this week. That could still continue.
Several indexes have broken below 2 – 4 week and 1 – 3 month support, confirming that a larger-degree decline is unfolding – in line with expectations for a sharp drop that could be similar to early-2018 and several previous 2 – 4 week declines of similar magnitude.
All of this is fulfilling ongoing analysis for at least a 5 – 10% sell-off in Sept/Oct. – when a consistent 2-Year Cycle came back into play (focused on the first two weeks of October). A larger decline is possible.
In 2012, 2014 & 2016 (as well as in 2008), equity markets peaked in early-to-mid-Sept. and then corrected for 4 – 6 weeks. In each case, those declines overlapped the first 3 weeks of October. (They also experienced related 3-week sell-offs from mid-Sept. into early-Oct. – in 2011 and 2013.)
This 2-Year Cycle has consistently timed sharp corrections that usually see their accelerated phase at some point in Oct., primarily in the first half of the month.
The potential for an Oct. sell-off was corroborated in late-Sept. by the Russell 2000, NYA & DJTA – pinpointing the final 10% of their expected low – low cycle (late-March – late-Oct. 2018) as the time that was most likely for an accelerated decline. That is unfolding, right on cyclic schedule…
Crude Oil, Unleaded Gas & Heating Oil turned their intra-month trends down, removing any remaining 1 – 2 week upside potential – shortly after Crude re-attacked and held the 2018 primary upside target that extends up to 77.30/CL. It has dropped to its weekly HLS (71.98/CLZ) while twice neutralizing its daily uptrend. As a result of both these factors, Crude needs a daily close below 71.66/CLZ to trigger any further selling in the near term.
Natural Gas remains strong and is fulfilling the outlook for an overall surge into mid-Oct. (and then into mid-to-late-Dec.). It could reach ~3.5000/NGZ and attack its monthly LHR(extreme upside target for October), potentially by mid-Oct. Natural Gas remains positive until a daily close below 3.235/NGZ.”
The potential for (and realization of) an October plunge in equity markets is weighing on energy markets (except Natural Gas) immediately after Crude fulfilled multi-month & multi-year cycles that project a significant peak in/around Sept. 2018 (coinciding with Middle East cycles that project a major shift surrounding late-Sept. ’18).
Natural Gas, in contrast, is fulfilling analysis for an initial rally into mid-Oct. and a larger overall advance into mid-to-late-Dec. ’18. October 2018 is signaling serious trouble for both Energy & Equity markets – in precise lockstep with cycles and analysis that have been discussed since 2017.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.