Late-Aug. Cycles Reinforcing Topping Process; Watch NQ-100 & Tech Stocks.
Late-Aug. Cycles Reinforcing Topping Process; Watch NQ-100 & Tech Stocks.
08/25/18 Weekly Re-Lay: Stock Indices are mixed near their highs with the Nasdaq 100 lagging as the DJIA & ESU rallied from bullish signals generated on Aug. 15/16. That has fulfilled the DJIA’s weekly Cycle Sequence as the S+P retested its all-time high – setting the stage for a multi-week correction…
Stock Indices are showing renewed divergence with respect to their Jan. highs. The NQ-100 exceeded those highs with ease and are targeting a potential spike high on Aug. 24/27. In contrast, the DJIA, NYSE & MMX remain well below their late-Jan. highs with all three struggling to exceed their secondary peaks of late-Feb.
In between lies the S+P 500 and DJTA – both of which are attacking their Jan. highs, fulfilling their weekly trend patterns and setting the stage for an intermediate peak.
The latest rallies came on the heels of 1 – 2 week signals triggered in the DJIA & ESU – when they corrected to their weekly extreme downside targets on Aug. 15 (24,944 – 24,977/DJIA & 2806.5 – 2811/ ESU) and generated daily trend buy signals. That signal usually spurs a rally to an opposing LHR, which is why the S+P was/is focused on 2888/ESU.
There are a few factors arguing for an intermediate peak in late-Aug. (now). One of them is a 10-week low – low – low – low – high – low – high – (high) Cycle Sequence projecting a DJIA peak for Aug. 21 – 28. Another is the S+P 500 (cash) retesting its all-time high AND surpassing the longest bull market in history (by some accounts).
Another way to look at that is that the stock market – since the March ’09 low – has just matched the duration of the 1990 – 2000 advance, a form of wave equality or similarity. Finally, there is an ongoing ‘rhythm’ (cycle) in the DJTA that has just reached fruition.”
Stocks are validating analysis for a topping process in 3Q 2018 followed by a substantial decline in 4Q 2018. The Indexes are poised to set 2 – 4 week peaks in late-August, just as the S+P 500 is signaling an extremelymature bull market. The NQ-100 and key tech stocks appear poised to set significant peaks.
By year-end, the DJIA is projected to drop to 22,100/DJIA – its primary downside target for 2018. Look for precarious period in 4Q 2018, particularly after/if (lower) peaks are set in late-Nov./early-Dec.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.