Stock Index Trading; Focus on late-Jan./early-Feb. ’20.

12/11/19 Weekly Re-Lay Alert: Stock Indices remain in intermediate uptrends after experiencing sharp pullbacks in the opening days of December.  Those sell-offs perpetuated a ~2-month (60-degree) cycle during which sharp declines took hold in early-June, early-Aug. & early-Oct. – each time unfolding during the first 2 – 3 trading days of the new month but never turning their intra-month trends down.

In early-Dec., stock indexes repeated the pattern (cycle) and twice neutralized their daily uptrends – while selling off into Dec. 3

In addition to the reasons already cited (see late-Nov. & early-Dec. Weekly Re-Lays), another corroborating reason is a unique fractal between the 2-month cycle, the 2-Year Cycle (that was uncanny in pinpointing the swings of 2018 – particularly the sell-off beginning in Oct. ’18… see page 7 of insiidetracktrading.com/wp-content/uploads/2019/11/40YC-Stocks-2018-2021-VII.pdf) and the 4-Year Cycle.

In short, the next phase of the 2-month cycle, the next phase of the 2-Year Cycle and the next phase of the 4-Year Cycle all focus on early-Feb. 2020.

The following quote, from the Sept. 26, 2018 Alert – 720 Degrees: What the 2-Year Cycle Reveals explains part of that cycle:

“One of the most consistent cycles in equity markets is an approximate 2-Year Cycle (accounting for similar consistency in a corresponding 4-Year Cycle and even 8-Year Cycle). 

This 2-Year Cycle has multiple facets, including the timing of related moves at a ~24-month interval.  This is more likely when the market has been in a similar trend for several years.

In many instances, those similar moves will be on progressively higher or lower degrees (magnitudes) due to the progression of higher and lower magnitude waves. 

A perfect example involved the following sequence on a 2-year interval:

– A moderate sell-off that bottomed on Feb. 3 – 12, 2014 (~1250/DJIA points or about a 7.5% decline).

– A sell-off of one larger degree that bottomed on Feb. 3 – 12, 2016 (~2500/DJIA points or about a 14% decline)

– A sell-off of one larger degree that bottomed on Feb. 3 – 12, 2018 (~3250/DJIA points or about a 12% decline).

Previously, the DJIA also had a decline of 900 points or 8.3% that bottomed on Feb. 3 – 12, 2010.” 

That 4-Year Cycle is also worth examining with respect to Nov./Dec. 2015… Just like 2019, those indexes topped in a sequence with the Transports topping earlier than the others.  And just like in 2019, they suffered sharp sell-offs in the opening days of Dec. ’15, before rallying back to retest their highs.  Will the parallels continue?


Stock indexes repeated a ~2-month pattern that has timed sharp sell-offs (and multi-month lows) in the opening days of every other month since June ‘19.  On a broader basis, they continue to closely adhere to the 40-Year Cycle – replicating the swings seen in 1978 – 1979 while providing important clues for 2020.  Focus is beginning to shift to late-Jan./early-Feb. ’20 – when an uncanny 2-Year Cycle will join the 40-Year Cycle (as well as the 8-Month & 16-Month Cycles).  

What Does early-Dec. Sell-off & Low Signal?

Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.