Stocks Focused on Mid-June ’24 Cycle Lows. NQ-100 Bottom Likely in Late-May ’24.
05/08/24 – “Over the past 5 – 7 years, a recurring topic of discussion is the ‘Energy/Equity Connection’ – the loose correlation between moves in the energy sector and similar moves in the equity markets.
As explained in the 2018 excerpts on page 2, this is NOT a precise link and usually has levels/periods of divergence – when one has already completed a move and the other has not – but there is enough connection to make it worth monitoring.
Last year, stocks entered negative cycles in August – October ’23, while Crude lagged a bit – with cycles projecting a September – December ’23 sell-off. In 2024, Energy markets are portending a drop from mid-April to early/mid-July while stocks again led the way – turning negative in late-March and projecting a likely decline that could/should stretch into mid-June ’24…
Stock Indices are in the latter stages of what is most likely a ‘b’ wave bounce – sandwiched between an initial ‘a’ wave decline and an expected (potentially sharper) ‘c’ wave decline. They are fulfilling the 2 – 3 week reactive rally that was projected by the action of the April 19th lows with some indexes still waiting to confirm the late-March highs as multi-month peaks.
Most turned their intra-month trends up, projecting a rally to monthly resistance levels. They come into play at 5252.0 – 5326.0/ESM, 38,917 – 39,055/DJIA & 18,321 – 18,506/NQM…
On an intermediate basis, the oft-leading DJTA remains the weakest, failing to turn its intra-month (or daily) trend up while bouncing to its declining daily 21 High MAC & weekly 21 Low MAC… and flattening monthly 21 High MAC.
By spiking to a slight new inter-week high (above last week’s high), the DJTA has also initially validated a ~6-week high-high-(high) Cycle Progression that could trigger a ~6-week decline (into June 17 – 21, ’24) if confirmed. That potential decline would also validate some Golden-Ratio timing relationships developing in the DJTA – including a 1.618/1 high-high-low sequence.
In the short-term, the DJTA will be closely monitored as a potential ‘canary in the coal mine’ if it shows signs of reversing lower before other indexes. It has produced multi-week/intra-month lows on the 17th – 20th of the month in the past 4 months (and a high in Dec ’23) and could see another decline into May 17/20th.
The Nasdaq-100 has corroborating cycles that project the next multi-week low to take hold on May 20 – 24th, the next phase of a ~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.
The corresponding 69 – 71 day low-low-low-low-low-(low) cycle and related ~35-day low-low-(low) cycle recur on/around May 24, 2024.
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 have rallied since fulfilling multi-week sell signals that projected a sharp decline into April 19th… the completion of Natural Year 2024/25’s ‘Opening Range’ and the ideal time for a multi-week or multi-month low. That now becomes pivotal support for all the indexes in the months to come. 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.