Stocks Fulfill Cycle Lows; Reinforce Potential for New Advances of Higher Magnitude!
05/20/20 Weekly Re-Lay Alert: “Stock Indices remain mixed with the Transports, NYA and Russell 2000 in corrective phases (below their April 29/30 peaks) as the S+P 500 & Nasdaq 100 remain strong and progressively setting new highs – consistent with their weekly uptrends and intermediate outlook.
The latest short-term buy signals, on May 13/14, projected rallies to new highs in those indexes since they had not been able to turn their daily trends down during the preceding corrective phase. In the case of the S+P 500, it corrected for two weeks without ever turning that daily trend down.
The May 14 low fulfilled a 52-day low (Jan. 31) – low (Mar. 23) – low (May 14) Cycle Progression… The action of May 18 & 19 reinforced that and signaled that the May 14 low was likely the early fulfillment of a 9-week cycle – arriving two trading days early and ushering in the anticipated post-correction rally a little sooner than expected.
Where does that leave the indexes?
On an intermediate basis, they were expected to be in a corrective phase from April 29/30 into at least May 18. An expected low on May 18 – 22 was forecast to usher in a rally to new 1 – 2 month highs in the DJIA, ESM & NQM – leading into late-May. It could also have the NQM retesting its all-time high. All that remains valid…
The upside price and wave expectations have not changed and those indexes could rally to 25,230 – 25,409/DJIA, 3055 – 3067/ESM (slight chance of 3119 – 3123/ESM) & 9736 – 9822/NQM in the near term. Daily LHRs reinforce those levels could be tested on May 21/22.
All of that is reinforced by the fact the DJIA, ESM & NQM remain in 1 – 2 month uptrends from when multi-month cycle lows bottomed on March 23.”
Stocks set intermediate lows a couple days early, then resume advances. The stronger indexes are focused on future phases of the ~40-day cycle (that timed their May 4 lows) – 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 Upward Weekly Trend Signal Indicate for Stocks?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.