Price Action is Key! Daily & Intra-month Trends Project New Rally in Stocks & Likely Test of 7100/NQ Target. Next Cycle Low = Feb. 26 – 28.
Price Action is Key! Daily & Intra-month Trends Project New Rally in Stocks & Likely Test of 7100/NQ Target. Next Cycle Low = Feb. 26 – 28.
02/13/19 Weekly Re-Lay Alert – Price vs Time: “It is often stated (in these publications) that ‘price filters time’ or ‘price is the determining factor’. What that simply means is that cycles and timing indicators provide some initial and general expectations, but the corresponding price action must validate that.
Technical and cyclical analysis is a ‘numbers game’ – involving the calculation of probabilities based on multiple technical (price or chart-based) indicators and patterns. None of those indicators or patterns are perfect and not a one of them is 100% accurate.
The objective is to align the greatest synergy of corroborating factors in your favor and then set risk parameters in the event those factors are wrong. Sometimes price action will confirm and powerfully fulfill cycles. Other times, price action forces adjustments to the timing aspects of analysis. And, in the worst case scenario, price action forces a complete re-thinking of what was originally anticipated.
When it is all said and done, the most important factor is not a question of right or wrong, but rather the resulting action in each case. That is why proper money management and risk control is the most determining factor in the success of a trading account.
There are several new/recent instances of price action honing the timing outlook…
Stock Indices remain in intermediate uptrends but are fulfilling the overall outlook for the start of 2019 – a surge from multi-week cycle lows on Dec. 26/27… The 1 – 2 month upside objectives (stemming from the late-Dec. lows and reversal signals) remain at 25,324 – 25,462/DJIA, 2755 – 2765/ESH & 7104 – 7173/NQH. They are being attacked for the second time this week.
On a near-term basis, price action projected a quick sell-off into the first part of this week before daily cycles would turn back up (on Feb. 12, in line with a 45 – 48-day high (Aug. 7) – high (Sept. 21) – high (Nov. 8) – low (Dec. 26) – (low) Cycle Progression in the S+P 500).
The action of the daily trend patterns was the primary price action that was being used to filter this timing analysis.
In order to confirm a 1 – 2 week (or larger) peak, stock indexes need daily closes below 24,977/DJIA, 2695.5/ESH & 6858/NQH. Otherwise, retests of those highs would be likely.
Equities began the week with some renewed selling as the DJIA closed lower (on Feb. 11) for the fourth consecutive day. However, neither the DJIA nor any of the other primary indexes were able to turn their daily trends down on Monday. That signaled a rally back to the highs, since a 1 – 2 week top was not confirmed.
Stock indexes also spiked to new intra-month lows but could not close low enough to turn their intra-month trends down – reinforcing the support of the prevailing intermediate uptrend and projecting new highs.
Along with daily cycles, stocks turned positive on Feb. 12 and rallied back to their highs – with the DJIA & ESH turning their intra-month trends up. That projected follow-through into mid-month (Feb. 14/15), so a little more upside is possible… The Indexes remain in intermediate uptrends with the potential for higher highs stretching into April or May 2019.
In the interim, another low is likely on Feb. 26 – 28 – the latest phase of a ~60-degree/~2-month high (Aug. 29) – low (Oct. 26) – low (Dec. 26) – low (Feb. 26 – 28) Cycle Progression that has timed repeated intermediate turning points in the Nasdaq 100. Prior to its late-Aug. high, the NQ-100 also had preceding lows on June 27 & April 25 – perpetuating this ~2-month cycle.”
Stocks following lead of daily & intra-month trend signals, both of which turned positive this week and projected rallies into Feb. 14/15. Nasdaq 100 remains pivotal index with focus on 1 – 2 month upside target (from the Dec. 26 low) at 7104 – 7173/NQH. Subsequent low is expected on Feb. 26 – 28.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.