Stock Indexes Diverging; Transports Project Nov. 21/22 Low as DJIA, S+P 500 & NQ-100 Remain Positive.
11/20/19 Weekly Re-Lay Alert – A Decisive Two-Day Period: “The markets are entering a pivotal two-day period, when key 1 – 2 week signals will be generated, confirmed, or negated. Foremost among them are Stock Indexes, which now enter a critical period…
Stock Indices have fulfilled multi-month expectations, rallying into Nov. 2019 and perpetuating a ~7-month low (July ’17) – low (Feb. ’18) – high (Sept. ’18) – high (April ’19) – high (Nov. ’19) Cycle Progression. If a 1 – 3 month peak is set this month, it would project focus to June 2020 for a subsequent (~7-month cycle) peak…
All of the primary indexes fulfilled multi-month upside targets and have entered a multi-week period when their inversely-correlated weekly 21 MARCs are surging – a factor that could soon become a negative influence. That was expected to support price action for the first two weeks of Nov. and then steadily shift to becoming a neutral and then negative factor during the second half of the month…
As is often the case, the DJIA is one of the last indexes to peak (roller-coaster analogy). Several other indexes – some incorporating a much larger number of stocks – have been peaking since Nov. 5 (Russell 2K) – Nov. 7 (DJTA)… The DJTA peaked on Nov. 7 – spiking to new intra-month highs without turning its intra-month trend up – and then sold off with a convincing, outside-day/2 Close Reversal sell signal on Nov. 12.
Yesterday, the Transports spiked up to their daily 21 High MAC – and daily LHR and daily resistance – to begin the day and then reversed lower, generating a daily 2 Close Reversal Combo sell signal on the close. That was projected to spur a new 2 – 3 day sell-off… potentially a sharp one.
The ideal scenario was to see it close below ~10,790 today – a feat it accomplished with relative ease… As conveyed in the 11/19/19 INSIIDE Track Intra-Month Update, the Transports could see a sharp drop into Nov. 21 or 22 – perpetuating a 49 – 51 day low (June 25) – low (Aug. 15) – low (Oct. 3) – low (Nov. 21/22) Cycle Progression – and set a 3 – 5 day low.
That is now corroborated by the daily trend and daily 21 MAC signals that usually occur within 1 – 2 days of an initial low… While that low would not likely signal the end of this decline, it would usher in the potential for a rebound and several days of congestion before a second 1 – 2 week (or at least 3 – 5 day) sell-off. Also, as stated before, Asian Indexes are also looking very precarious. The Nikkei & Hang Seng gave new sell signals on Nov. 18/19 and are poised to drop sharply.
The next two days are also (primarily) decisive, due to the daily trend structure in the DJIA, ESZ & NQZ…
The ESZ and NQZ cannot turn their daily trends down until the Nov. 22 close, at the earliest (trigger points are not yet established), expanding that focus to the next two days.
The DJCA (Dow Jones Composite of Utilities, Industrials & Transports) provides a nice compromise between the diverging Dow Indices… Since it has just dropped to its ascending daily 21 High MAC – and the low of its Nov. 6, 11 & 13 pullbacks…
To reiterate, the equity indexes are entering a very decisive two-day period.”
Stock indexes are entering a decisive two-day period when the Transports will likely complete their initial sell-off, bottom on Nov. 21/22, and then rally into next week. The DJIA, S+P 500 & Nasdaq 100 daily trend patterns corroborate that potential and could spur rallies to new highs when Transports rebound.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.