Stocks Nearing 1 – 2 Month Targets; Weekly Trends Project New Advance After Brief Pullback! How Far Could Overall Rally Extend?
Stocks Nearing 1 – 2 Month Targets; Weekly Trends Project New Advance After Brief Pullback! How Far Could Overall Rally Extend?
02/06/19 Weekly Re-Lay Alert – “Stock Indices remain in intermediate uptrends but are fulfilling the overall outlook for the start of 2019 – a surge from multi-week cycle lows on Dec. 26/27 into a combination of multi-week, multi-month & even annual cycle highs in late-Jan./early-Feb.
Corroborating that, the weekly trends reversed to up in all three primary indexes – further confirming the late-Dec. lows and ushering in the time for an initial 2 – 4 week peak (since those weekly trend reversals are a lagging and confirming indicator that often pinpoint the culmination of an initial advance – leading to a final spike high and reversal lower in the ensuing week).
This rally has attacked weekly resistance levels and tested or is approaching the extreme upside targets at 25,324 – 25,462/DJIA, 2755 – 2765/ESH & 7104 – 7173/NQH, increasing the potential for a 1 – 3 week correction to take hold from near those levels. Daily LHRs, Intra-week PLLRs, etc. reinforced these targets.
The DJIA is also attacking its weekly 21 High MAC at 25,389 – the same indicator at which the Dec. 3 peak was set. Though the futures are still a little shy, the Nasdaq 100 cash index is doing the exact same thing – attacking its weekly 21 High MAC (7030) while setting today’s peak at 7034.
This is what would be expected from a market that has turned its weekly trend up and is likely to pull back (from that resistance) before entering another phase of a larger-magnitude advance.
On a more near-term basis, this is occurring mid-week and during the fourth trading day of the new month, without closing above the trading ranges of the first three trading days. As a result, the intra-month trends are neutral – reinforcing the potential for a peak at this time…
Stock indexes remain positive and would not turn their intra-month trends down (and confirm a 1 – 2 week top) until daily closes below 24,977/DJIA, 2695.5/ESH & 6858/NQH.
If a sell-off begins immediately, it could lead to an initial low on Feb. 12, perpetuating a 45 – 48-day high (Aug. 7) – high (Sept. 21) – high (Nov. 8) – low (Dec. 26) – (low) Cycle Progression in the S+P 500. Other indexes have contrasting cycles, so price action needs to filter this. The daily trends could also be positioned to corroborate that cycle.”
Stocks are signaling a near-term pullback after rallying into Feb. 5 – 6. – the latest in a series of expected ascending highs. Daily cycles again turn positive on Feb. 12, so this pullback is likely to be short-lived. Daily trend patterns will need to filter expectations for the next rally. Nasdaq 100 remains pivotal index with focus on 1 – 2 month upside target (from the Dec. 26 low) at 7104 – 7173/NQH.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.