Stocks Fulfilling ‘Perfect Storm’ of Sell Signals (Feb. 7 – 14); Plunge into Late-March ’20 Likely!
02/29/20 Weekly Re-Lay: “Stock Indices powerfully validated the 2-Year & 40-Year Cycles – both calling for sharp sell-offs in the second half of Feb. ‘20. In doing so, equities also fulfilled the 4-Shadow Signals of late-Jan. – similarly projecting a culminating rally into mid-Feb. followed by a higher-magnitude decline. The initial sell-off is likely to bottom now (Feb. 27 – Mar. 4) but a subsequent decline could soon follow…
Stock Indices are fulfilling the ‘Perfect Storm’ of bearish cycles and indicators that converged on Feb. 7 – 14 and projected a higher-magnitude sell-off…
— The 4-Shadow Signal – that projected a final rally to divergent highs into Feb. 17 followed by a larger sell-off in the weeks that followed – ultimately targeting the June/Aug. ’19 lows;
— An Intra-Month Inverted V – that projected an intra-month peak on Feb. 13 – 17 followed by a plunge to new lows into month-end;
— The 40-Year Cycle – that projected a rally into Feb. 12/13 followed by a sharp drop into late-Feb. and potentially into late-March;
— And DJTA (as well as many related stocks and indexes) monthly & weekly cycles – that projected a drop from late-Jan…
— The Dow intra-year downtrend signals (Jan. 31).
The uncanny similarities of the 2-Year & 40-Year Cycles – during that period between Feb. 13 – 17 and month-end – remain a very intriguing aspect of this time frame. With regard to the 40-Year Cycle:
On Feb. 12/13, 1980, the DJIA peaked and stocks dropped 8 – 10% into late-Feb. (as part of an overall ~20% decline into late-March ‘80).
On Feb. 12/13, 2020, the DJIA peaked and stocks dropped ~10% (or more) into late-Feb. – a near perfect repeat of the 40-Year Cycle. There is a real chance that this sell-off could extend after some intervening – and volatile – consolidation.
It is also fascinating how the FAANG stocks produced a remarkably-similar setup in mid-Feb. ’20 as they did in late-Sept. ’18 – two periods that both had bearish 2-Year Cycle setups as well.”
Stocks plunging in lockstep with 2-Year Cycle & over-arching 40-Year Cycles as well as weekly Cycle Progression in Transports & Industrials & ominous 4-Shadow Signal triggered in late-Jan/early-Feb. Perfect Storm of sell signals – triggered on Feb. 7 – 14 – signals ‘significant top’, ‘start of a much larger process’, ‘majority of sell-off to follow’, significantly negative impact on overall market’, leading to ‘intra-year trends down, which would have a longer-reaching impact on the overall equity market’.
These damaging signals reinforce the 40-Year Cycle and 2-Year Cycle outlook for another plunge into late-March 2020.
What Would March ’20 Stock Market Plunge Mean for 2020 – 2022?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.