Stocks Nearing 2018 Downside Targets; S+P Weekly Cycles Bottom on Dec. 24 – 28.
Stocks Nearing 2018 Downside Targets; S+P Weekly Cycles Bottom on Dec. 24 – 28.
12/22/18 Weekly Re-Lay – Stock Indices remained negative and closed below their early-year lows, confirming a larger-magnitude decline. That validates the 3 – 6 month and 6 – 12 month outlooks that focused on 4Q 2018, and the time frame after a projected secondary high in late-Nov./early-Dec.. as being the most negative in 2018. That coincides with European equities that have been forecast to, and have since fulfilled, analysis for sharp declines from late-Sept. into year-end… S+P weekly & daily cycles could produce a multi-week low on Dec. 24 – 28…
Stock Indices have broken through key levels twice in the past week, each time signaling an escalation of the unfolding decline and an extension to the latest 2 – 3 week drop (from the early-Dec. daily, weekly & monthly cycle high).
The Transports continue to plummet since fulfilling projections for an early-Dec. top, peaking in precise sync with an 11 – 12 week low-low-high-(high) Cycle Progression while reaching upside targets… Throughout 2018, the intra-year and multi-year outlook has focused on late-2018 for the time when cycles would begin to turn decidedly bearish (after a secondary/lower high in late-Nov./early-Dec.).
Most indexes closed below early-2018 lows, powerfully confirming 3Q ‘18 analysis that stocks were completing a 5th of 5th wave advance and multi-year uptrend. That wave fulfillment was perfectly timed with cycles that turned bearish in Oct. ’18 and then escalated in Dec. ’18 (after a projected lower high in late-Nov./early-Dec. ‘18).
With this confirmation signal triggered, two key factors need to be revisited. The first addresses multi-year cycles that portend a sharp decline in 4Q ’18… The second is the DJIA’s need to break below its early-year low and reach its 2018 downside price target – a critical objective that is now in view. Both were reiterated in the July ‘18 INSIIDE Track, preparing for an 3Q ‘18 peak & reversal:
“…larger-degree cycles that converge in 4Q 2018 … a ~3.25 year (12 – 13 quarters) low-low cycle that has timed important lows in 3Q 2002, 4Q 2005, 1Q 2009, 2Q 2012 & 3Q 2015… It would take a weekly close below 23,360/DJIA to signal a larger-degree correction… to its 2018 support & primary target for the year – around 22,100/DJIA.”
Stocks are nearing downside price targets for 4Q 2018 and for all of 2018 as they complete ongoing analysis for a very bearish 4Q 2018. If/when the DJIA reaches 22,100, it could trigger a sharp bounce into weekly cycles on Jan. 7 – 11, 2019. The daily trend pattern will be the key.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.