Stocks “Casting Shadows Ahead’: Indexes Providing New Clues for Aug. ’19 Danger Period. What Does Intra-Year Trend Support Portend for June ’19?
05/29/19 Weekly Re-Lay Alert – Implications of the May 31 Close – “Stock Indices are in the midst of a very decisive two-week period that could have far-reaching implications – influencing what to expect into/through 3Q 2019 and potentially through year-end.
They continue to drop in fulfillment of their negative daily trends, intra-month trends, and daily 21 MACs – as well as daily cycles that again turned negative on May 23 – and are approaching one of the most significant days within that two-week period, the May 31 weekly and monthly close.
All three primary indexes (and many others) have now neutralized their weekly uptrends at least twice (DJIA & S+P 500 have done it three times). It would take weekly closes below 25,222/DJIA, 2799/ESM & 7268/NQMto reverse those trends down. That is why primary focus is on the closing prices of May 31.
If that occurs, it would powerfully corroborate the outlook for an overall correction from late-April/early-May into Aug./Sept. 2019. That (expected) 3Q ’19 low is the latest phase in a 2-year and 4-year cycle that has been discussed since 2017. It timed the 2007 peak and then began timing subsequent lows – usually multi-quarter lows – following sharp declines.
In mid-2017, the intervening 2-year cycle was forecast to time an interim low and spur a subsequent rally into early-2018. That low arrived on schedule and projected a corresponding low 2 years in the future – in 3Q 2019.
The last two phases of the 4-year cycle timed the May – Oct. 2011 sell-off and the May – Aug. 2015 decline. Prior to the opposing peak in 3Q ‘18, and sharp decline in 4Q ’18, those 2011 and 2015 sell-offs were two of the sharpest of the past decade.
Will May – Aug./Sept. 2019 see anything similar?
At least one index, the one that so frequently leads turning points of this magnitude, has already confirmed a multi-month peak by turning its weekly trend down.
The DJ Transports did that on May 24. That set the stage for an imminent low (ideally during this week) and reactive 1 – 3 week bounce…
From a price perspective, several indexes (though not the S+P 500 or Nasdaq 100 yet) are approaching or testing their Jan. 18 highs – a key level of intra-year trend support.
That is the high of the 2019 opening range (the first three weeks of the new year) and is the level these markets must remain above – on a weekly close basis – if their intra-year trends are to remain positive. So, that is another level to monitor on the May 31 close.
The S+P 500 and Nasdaq 100 are approaching their weekly 21 Low MACs, which will also be assessed based on the May 31 close (in relation to those weekly 21 Low MACs).
For now, the 1 – 2 week and 2 – 4 week trends are down and would show no signs of bottoming until daily closes above 25,736/DJIA, 2843.5/ESM & 7380/NQM.”
Stocks casting shadows ahead, with May ’19 sell-off presaging what is expected in Aug. ‘19. May 31 is likely to signal completion of an initial decline and the latest phase of a multi-month topping process. Intra-year trend support, in primary indexes, maintains underlying resilience (for now). All the indexes are confirming the dangerous period forecast for May – Aug. 2019… and intensifying the focus on Aug. ’19 for a sharp sell-off that could resemble Aug. 2015!. Why is 3Q ’19 so dangerous?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.