Stocks Poised for New Sell-off in First Half of June… & Mid-June Low.
05/30/20 Weekly Re-Lay: “Stock Indices have rallied since spiking lower into mid-month and setting the stage for subsequent rallies into late-month. The S+P 500 and Nasdaq 100 remain strong and could see additional spike highs on Monday. However, a pair of sell-offs is now likely in June – a type of ‘a-b-c’ correction that should last into (at least) June 15 – 19…
Stock Indices are fulfilling the latest phases of their ~2-month advances from the March 23 cycle low – triggered by the bullish daily trend and daily 21 MAC signals generated on May 14/15. They rallied to new 1 – 2 month highs, fulfilling the weekly trend patterns in the DJIA, ESM & NQM.
The rally into late-May also fulfilled the intra-month trend signals generated on May 18, just after the May 14 lows, and the potential for Intra-Month V Reversals. That pattern involves an initial peak at the start of the month, an intra-month low at mid-month (May 14) and a rally to new highs, leading into month-end.
Consistent with corresponding price analysis, those rallies were targeted to reach 25,230 – 25,409/DJIA, 3055 – 3067/ESM & 9736 – 9822/NQM before the end of May. Tuesday’s open and intra-week low raised the DJIA target with an Intra-week PLLR objective at 25,503/DJIA.
This past week’s highs were at 25,758/DJIA (25,548 = high close), 3065.0/ESM & 9604/NQM.
At the same time, the DJ Transports were targeted to retest their late-Feb. ’20 low (9127), a level that closely coincided with monthly resistance (9144 – 9388/DJTA) for May ’20 and with key intra-week targets in the DJTA (9186 – 9355/DJTA). The DJTA peaked at 9187. The Russell 2000 had related targets at 1430 – 1450/QRM and peaked at 1453.1/ QRM (high close = 1436.4/QRM).
While this action does not automatically signal a top or reversal lower, it does fulfill most of what was necessary to usher in a larger-magnitude peak. Since early-Dec. ’18, the Transports have set a multi-month peak every 18 – 20 weeks. This past week was the 19th week from the Jan. ’20 peak.”
Stocks fulfilling projected rallies into late-May while completing Intra-Month V Reversals higher. A similar pattern could emerge in June when a slightly larger correction is forecast (low expected on June 15 – 19, after which most bullish period should emerge). The stronger indexes remain 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. DJTA projecting multi-week peak by June 5 (and then in Oct. ’20) – in sync with 18 – 20-Week Cycle.
Why Does Late-June Usher in Bullish Period for Overall Stock Market?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.