Stocks Project Overall Drop into Mid-December; How Low Could They Go?
Stocks Project Overall Drop into Mid-December; How Low Could They Go?
11/17/18 Weekly Re-Lay: Stock Indices are in daily downtrends, even though some indexes maintain the potential to extend their rebounds into the current week. That is still likely to create some divergence with the NQ-100 in a weaker structure after perpetuating 5-week & 10-week high-high Cycle Progressions. That could/should spur an overall decline into Dec. 10 – 14…
Stock Indices are exhibiting signs of a ‘2’ or ‘b’ wave bounce, expected to ultimately yield to a ‘3’ or ‘c’ wave decline. There is still a distinct possibility that this rebound will peak with divergent highs – the DJIA spiking above its Nov. 8 high while the NQ-100 peaks below its corresponding Nov. 8 high.
That would allow the DJIA to fulfill its 7-week low (June 25 – 29) – low (Aug. 13 – 17) – high (Oct. 1 – 5) – high Cycle Progression even as the Nasdaq maintains its 5-week high-high-high-(high) & 10-week low-high-high-(high) Cycle Progressions that were fulfilled with the Nov. 8 peak.
Timing is never just a function of cycles and it is other factors that corroborate this outlook. One of the primary ones is the weekly trend pattern. When it turned down on Oct. 26 (in all three indexes), that lagging indicator portended three key things…
The first (confirmation) was that the early-Oct. highs would likely hold for at least a few months. The second (culmination) was the initial decline was reaching fruition and should give way to a 1 – 3 week rebound. All the indexes bounced for ~1.5 weeks but the DJIA could make that 3 weeks if it set a new high in the coming week.
(Other indexes, like the DJTA, MMX and possibly the Russell 2000 and NYA, appear to have slightly better chances at spiking above their Nov. 8 highs.) The third revelation was that equities should see another decline, taking them below the Oct. 29 lows, once the reactive 1 – 3 week bounce was complete.
As long as the Nov. 8 high holds in the Nasdaq 100, the next intermediate low could be seen on Dec. 10 – 14 (the next phase of that 5-week high-high-high-high-(low) Cycle Progression). That would also complete a 50% retracement in time for the NQ-100 – 30 weeks up and 15 weeks down.”
Stocks are powerfully reinforcing the outlook for an overall decline – from their late-Sept./early-Oct. highs into cycle lows in mid-Dec. Downside targets are taking shape and expected to be reached by then (watch the days surrounding Dec. 14). The action of late-Sept. – early-Nov. ’18 continues to reinforce expectations for late-2018/early-2019.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.