Stocks Fulfilling Late-Jan Danger Period; Add’l Sell-off Expected.
01/29/20 Weekly Re-Lay Alert: “Stock Indexes gapped lower on Monday, confirming that a multi-week high was intact after a series of divergent highs had taken hold from Jan. 16 – 24. That action validated the preponderance of indicators and cycles projecting a decisive peak.
In doing so, it reinforced expectations for (at least) an intermediate peak on Jan. 20 – 24, followed by a sharp sell-off that should last into Feb…(Feb. 2 – 13 is when the 2-Year Cycle targets).
The Jan. 20 – 24 peak perpetuated an 11 – 12 Week high-high-high-high-low-low-low-low-high-(high) Cycle Progression in the DJ Transports and fulfilled their weekly LHR.
It also fulfilled the 16-month low-low-low-high-(high) Cycle Progression that timed the late-Sept. ’18 peak (and a related 8-month cycle).
And it fulfilled an uncanny 2-Year Cycle while mimicking the late-Jan. ’18 peak (that led to a sharp drop into the early-Feb. ’18 low).
And, from a price perspective, those peaks took hold immediately after the primary indexes fulfilled intermediate upside objectives – spiking up to the convergence of multiple weekly LHRs and monthly resistance levels like 29,211 – 29,292/DJIA & 3304 – 3340/ESH. That is what was necessary before an intermediate peak would become more likely.
Price action has steadily corroborated those peaks.
On Jan. 23/24, the Russell 2000 and NYSE Index (and some key stocks) reversed their daily trends to down – providing the first confirmation that a multi-week top was taking hold in lead indexes.
That came at the same time the DJIA, ESH & NQH were generating outside-day/2 Close Reversals lower. The Transports confirmed that on Jan. 27 with a daily close below 10,991/DJTA – turning their daily trend down and setting the stage for a brief bottom.
Those daily trend signals often lead to an initial low and a reactive 1 – 3 day bounce – before a second decline. The indexes accomplished that, rebounding for the past two days before running into resistance near daily 21 MAC levels.
It would now take daily closes below 28,449/DJIA, 3233.0/ESH & 8925/NQH for the primary indexes to elevate these 1 – 2 week signals up to (at least) 2 – 4 week signals.
Those levels are significant for multiple reasons, including the intra-month trends and the S+P’s weekly HLS (3230.0/ESH) that was attacked on Monday’s sell-off.
Until those closes are generated, there is the potential for at least some stocks and indexes to spike to new highs before a second sell-off materializes.”
Stocks are fulfilling late-Jan. Danger Period, discussed for the past couple months, when a quick, sharp sell-off has been projected – in sync with the uncanny 2-Year Cycle. Similar to 2010, 2014, 2016 & 2018, stocks were projected to experience a sharp sell-off in late-Jan. ’20 leading into an intermediate low in early-Feb. ’20. Test of weekly HLS portends impending low. A second quick sell-off is likely first.
What Would an Early-Feb. Low Mean for April ’20 Cycles?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.