How High Could Stocks Rally into Next Week? Quick Pullback Should Intervene. What is Likely to Follow Next Surge??
How High Could Stocks Rally into Next Week? Quick Pullback Should Intervene. What is Likely to Follow Next Surge??
01/02/19 Weekly Re-Lay Alert – “Stock Indices extended their rallies after plunging into the convergence of daily & weekly cycles last week. The Dec. 26 low fulfilled a 14-week high-high-high-low (Dec. 24 – 28) Cycle Progression and a related 7-week high (Sept. 17 – 21) – high (Nov. 5 – 9) – low (Dec. 24 – 28) Cycle Progression and corroborating daily cycles.
More significant was the attainment of 2 – 3 month and 6 – 12 month downside price targets as the DJIA reached its primary downside target for all of 2018… at 22,100. At the same time, the Nasdaq 100 reached its 4Q 2018 downside target at 6200/NQ. That increases the likelihood that a 2 – 4 week (or longer) bottom took hold.
The Dec. 26 low also perpetuated a 15 – 16 trading day high-low-(low) Cycle Progression that projects the next 2 – 4 week low around Jan. 17 or 18.
Stock indexes turned their daily trends up, increasing the likelihood for an overall rebound into Jan. 7 – 11 – based on an overlapping, 14-week low-low-high-(high) Cycle Progression in the DJIA.
Since the daily trend reversals often trigger an intervening 1 – 3 day pullback, there is likely to be continued volatility as part of that rally. That could create a textbook ‘a-b-c’ corrective rally with the latest rally representing the culminating ‘a’ wave.
From a wave perspective (also representing ‘support turned into resistance’), the late-Oct. lows represent the first level of important resistance. Since those lows are in close proximity to the latest pairs of weekly LHRlevels (24,295 – 24,366/DJIA, 2637- 2646/ESH & 6752 – 6774/ NQH), they also identify the primary upside targets for these potential 12 – 16 day rallies.”
Stocks are confirming significant bottoms after reaching downside price targets for 4Q 2018 (6200/NQ) and for all of 2018 (22,100/DJIA) while fulfilling analysis for a very bearish 4Q 2018. The Dec. 26/27 lows set the stage for a multi-week bounce that should carry the DJIA, S+P & Nasdaq 100 higher into Jan. 7 – 11, 2019 and up to initial upside targets. A quick pullback (1 – 2 days) is likely to occur before cycles turn bullish again on Jan. 4.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.