Stock Rally Continues; Late-May (NQ) & Mid-June (DJTA) Cycle Lows in Focus.
05/13/24 – “Stock Indices remain in the second stage (a multi-week reactive rally from the April 19th lows) of what is expected to be a 2 – 3 month sell-off after fulfilling multi-year upside price targets and cycles in all six indexes in 1Q 2024.
In Elliott terms, they are in a likely ‘b’ wave bounce – sandwiched between an initial ‘a’ wave decline and a future (potentially sharper) ‘c’ wave plunge.
The ‘a’ wave sell-off fulfilled analysis for an initial drop from late-March into April 19th – enveloping the Month of Aggression (leading into the Date of Aggression)…
That strengthened the case for a substantial (overall) drop in March – May/June 2024 – ultimately fulfilling a 50 – 51-month low (Oct 2011) – low (Jan 2016) – low (March 2020) – (low; May/June 2024) Cycle Progression. However, more confirmation is needed.
On an intra-month basis, stock indexes are likely completing the reactive rally but have not yet signaled a secondary top. They are attacking monthly resistance, fulfilling their intra-month uptrends and increasing the potential for a new sell-off…
Stocks remain divergent with their weekly trends having projected slightly different outcomes. The April 19th lows – and coinciding weekly HLS and weekly trend indicators – projected a multi-week reactive rally to follow. The weekly trend indicators produced a pair of possibilities. In the case of the S+P 500, Russell 2000 & S+P Midcap 400, the ensuing rally was expected to lead to a lower high.
In contrast, the failure of the DJIA & NQ-100 to turn their respective weekly trends down (on April 19th) left open the possibility that the subsequent 2 – 3 week rally would retest the March ’24 highs… or at least get pretty close to them. That is where they currently stand.
Their intra-month uptrends projected a rally into mid-month and to monthly resistance levels… From a cyclic perspective, part of the focus is on the potential for a future (multi-week) low near May 24th. That would fulfill the Nasdaq-100’s ~10-week low-low-low-low-low-(low) Cycle Progression that was reinforced by an intervening ~5-week low-low-(low) Cycle Progression when the April 19th low was formed at the midpoint of that cycle…
1 – 3 month & 3 – 6 month traders could have exited a portion of long positions in March, anticipating a sell-off that could stretch into late-May or even mid-June 2024.”
Stock Indexes remain above their April 19th lows – the completion of Natural Year 2024/25’s ‘Opening Range’ and the ideal time for multi-month lows. That now becomes pivotal support for all the indexes in the months to come. Divergent highs are expected soon (new highs in DJIA & NQ-100?) and divergent lows are expected in late-May and mid-June before rallies into July ‘24.
The stronger NQ-100 remains positive (see related 17-Year Cycle analysis and what that could mean for July & October 2024) and could/should adhere to the general intra-year parallel to 2007 (successive highs in 1Q, July, and then October ’24… similar to 2007). The DJTA is leading this ‘a-b-c’ correction and could stretch a low into mid-June ’24 before setting a multi-month bottom – in line with a powerful convergence of cycle lows in that index.
How Do Late-May (NQ) & Mid-June ’24 (DJTA) Cycle Lows Influence 2024 Outlook?
How Does This Correspond to 17-Year Cycle of Stock Peaks & Declines?
Could This Ultimately Lead into the 2025/26 Recession Cycle?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.