Stock Market Confirming Peak

01/02/16 Weekly Re-Lay:   “Stock Indices are beginning to turn down – immediately after weekly cycles peaked – but need to provide more confirmation that a new multi-month decline is in its infancy.  3–6 month & 6–12 month traders should have sold Indices at their early-Nov. highs and be holding these short positions.

Stock Indices continue to mimic the overall action of 2000–2002, when almost every sharp sell-off was quickly met with a contrasting rally and almost every rally was followed by a slightly larger decline.  The action of late-2014–late-2016 (potentially extending into 2017) was expected to be a similar pattern in which a sustained decline (or advance) is rarely, if ever, able to take hold. 

In the near-term, the Indices are in a 2-month period of consolidation with most of them remaining below their early-Nov. highs (when sell signals were triggered in all but the NQ).  However, actual bearish cycles were not expected to take hold until after mid-December.

That is where the Indices now find themselves, closing (slightly) lower on the year and in the midst of a 3–5 week period when an initial decline is more likely to take hold. That has been partially corroborated by a developing ~4-week high-high-high Cycle Progression that could spur a quick, ~4-week drop into late-January.

That potential is reinforced by the action of early-2015, when many Indices experienced quick declines into late-Jan./early-Feb.  So, a ~360-degree move – from those early-2015 lows – could produce a similar intermediate bottom in late-Jan./ early-Feb. 2016. 

[And, an initial low in late-Jan./early-Feb. 2016 would set the stage for a more significant bottom – when it is already expected – in late-April/early-May 2016… 90 degrees from those lows AND 360 degrees from the 2015 highs.]

The DJ Transportation Average closed ~18% lower than its Dec. 31, 2014 close, which also made it ~19.5% off of its late-Nov. 2014 peak.”   TRADING INVOLVES SUBSTANTIAL RISK.

In mid-December, Stock Indices entered the first danger period of 2016 Crash Cycles.  Early-Nov. sell signals remain in force and were reinforced by late-Dec. action. Sharp drop into late-Jan./early-Feb. projected.  Subsequent periods – of intensifying trouble – expected in 2016… specific dates taking form.