Stocks Confirm Multi-Month Lows; Project Future Advances of Higher Magnitude!
05/09/20 Weekly Re-Lay: “Stock Indices sold off into May 4 but could not turn their daily trends down. They tested daily support levels and held, soon triggering new 3 – 5 day buy signals… At week’s end, the DJIA, ESM & NQM turned their weekly trends up – reinforcing what has been suspected for the next correction… that those indexes should pull back to higher lows and maintain March 23 as a multi-month bottom…
Stock Indices remain in bullish multi-week (and 1 – 2 month) trends, still exhibiting a ‘tale of two realities’ between weaker stocks/indexes (DJTA, Russell 2000, NYA) and stronger ones (NQ-100, S+P 500). However, all are fulfilling short-term & intermediate cycles. They are just experiencing proportionately different moves in between.
Most recently, they experienced two corrective phases – projected for April 9 – 23 (it lasted into April 22) and for April 29 – May 4/5 (it lasted into May 4). That fulfilled a 40-day high (2/12) – low (3/23) – low Cycle Progression in the DJIA and a ~30-degree cycle that has been in play since late-Sept. ‘19.
The quick, sharp drop into May 4 perpetuated a similar pattern seen in late-Sept./early-Oct., late-Nov./early-Dec., late-Dec./early-Jan., late-Jan./early-Feb. & late-Mar./early-April. Each time, this ~30-day/30-degree cycle triggered a quick sell-off that neutralized the daily uptrend and bottomed before the new intra-month trend could turn down.
That pair of bullish signals was reinforced by the ascending daily 21 MACs, this time around, with the stronger stocks and indexes pulling back and spiking below the rising daily 21 High MACs but not closing inside those channels.
At the same time, indexes like the NQ-100 simultaneously tested and held their weekly 21 MARC support (8564/NQM was weekly 21 High MARC; 8556/NQM was May 4 low).
One important shift took place on Friday. All three primary indexes (DJIA, ESM & NQM) turned their weekly trends up – following the lead of the NQ-100 cash index two weeks ago. That reaffirms what has already been discussed – that these indexes are expected to pull back to higher lows during the next correction.”
Stocks poised for renewed divergence with S+P 500 and Nasdaq 100 likely to hold above their May 4 lows (while weaker stocks and indexes drop to lower lows later in month). The stronger stocks now focus on future phases of the ~40-day cycle (that just timed the May 4 low) – projecting a subsequent, higher low around June 12/15 and likely inverting to ensuing highs around July 22 – 27 and late-Aug./early-Sept.
On a broader basis, stocks are steadily confirming the 40-Year Cycle and 2-Year Cycles that projected plunges into March 23 – 27, 2020 – the precise time the DJIA bottomed in 2018 AND 1980 – and subsequent advances into 3Q ’20 and potentially into 2Q ‘21.
What Does 2Q/3Q ’20 Likely Hold for Equities?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.