Nasdaq Fulfills Daily & Weekly Trends; Nov. 20/21 Low Likely.
Nasdaq Fulfills Daily & Weekly Trends; Nov. 20/21 Low Likely.
11/20/18 INSIIDE Track Intra-Month Update: Stock Indices are mixed with regard to their Oct. 29 lows – showing another level of divergence on a short-term basis (with new lows in some stocks and indexes but not in others). That perpetuates what has been unfolding throughout this decline – often providing clues about short-term highs or lows. The Nasdaq 100 remains one of the weakest and just fulfilled its daily & weekly trend patterns by setting new lows for this entire correction.
It could also be reinforcing a future cycle low if it sets another 3 – 5 day low now. From an intermediate perspective, the outlook remains the same for this sector.
The Nasdaq 100 fulfilled its 2 – 4 week downside objectives on Oct. 26 and was expected to then see a sharp rebound from Oct. 29 into Nov. 5 – 9, the latest phase of its 5-week high-high-high-(high) & 10-week low-high-high-(high) Cycle Progressions, and up to 7210 – 7261/NQZ.
It fulfilled that with the Nov. 8 peak at 7231/NQZ and has sold off since then…That Nasdaq 100 bounced into Nov. 19 (the third day of that 1 – 3 day reactive bounce) and turned back down without ever neutralizing its daily downtrend (similar, from a pattern perspective, to what occurred on Oct. 11 – 16).
After spiking above its previous three days’ highs on Nov. 19, the NQZ reversed back down and again plunged to new lows – dropping right to its daily HLS – signaling that another minor low could take hold in the ensuing days (Nov. 20 or 21)…
Corroborating the Nasdaq outlook, several tech stocks (AMZN, MSFT, AAPL & GOOGL) reinforced that outlook with even clearer indicators – particularly their daily trend patterns. In each case, they projected a drop to new lows since they were unable to turn the daily trends up during their rebounds into Nov. 8.
In addition, there is a recurring, 13 – 14 trading-day high-high-high-low-low-low-(low) Cycle Progression in some of them that was fulfilled with the Nov 19 decline. The daily trend pattern and daily HLS levels signaled a likely spike low and reversal higher today…
As for the DJIA & ESZ, they both remain slightly ‘stronger’ (or less weak) and could stay in volatile congestion for a couple more weeks. Both of them bounced 50% of their Nov. 8 – Nov. 14/15 declines before reversing back down on Nov. 19. That led to a sharp drop that attacked and held their daily HLS levels, signaling that a new 1 – 2 week low should take hold in the days that follow (Nov. 20/21).
With these wild swings, these daily indicators are providing important clarification to the general outlook – sometimes stretching it to is larger extreme and sometimes fulfilling the bare minimum before reversing. Since the short-term action is very fast-paced, intermediate traders should stay focused on the weekly trends and what they continue to reveal about the potential for another leg down in Dec. and/or Jan. 2019…
One other index is also being monitored with regard to upside potential during November. That is the DJ Transportation Average. When the DJIA, S+P 500 and NQ-100 turned their daily trends back down – on Nov. 14 – it showed that a subsequent bounce was then likely to set lower highs before another quick drop. That had been the expectation in the Nasdaq-100 all along, but the DJIA had not previously removed the possibility for a retest of its Nov. 8 high during a bounce into Nov. 19 – 23.
After the daily trends turned down, it effectively removed that potential and signaled a lesser bounce to a lower high. As that was occurring, the DJTA did not reverse its daily trend down and has only neutralized its daily uptrend once.
That is why it (as discussed in a recent Weekly Re-Lay) has not removed the potential for a rally above its Nov. 8 high before it violates its Oct. 29 low. It has only retraced about 50% of its Oct. 29 – Nov. 8 rally, leaving it in a far more constructive structure – capable of rallying back to its Nov. 8 high in the coming days or weeks.
If that occurs, it would be another example of what has been discussed previously – with the weaker indexes helping to time short-term lows (like the NQZ & tech stocks appear to be doing for Nov. 20 or 21) and the stronger indexes to help time short-term peaks.”
Stocks turned back down after completing reactive bounces into Nov. 19… and are already showing signs of another important low. That is due to multiple factors (daily cycles, daily & weekly trend pattern in NQ, daily trend pattern in tech stocks, daily HLS levels, divergence between NQZ and other indexes etc.). Oct./Nov. ’18 stock market action honing outlook for coming months.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.