Stocks Project Second Plunge After Mid-Feb; Portend Drop into Feb. 26 – 28!
02/07/20 INSIIDE Track Stock Index Update: “Stock Indexes are passing through a Perfect Storm of critical cycles and indicators… setting the stage for a divergent peak and larger-magnitude (3 – 5 week instead of 3 – 5 day) correction…
The DJIA, DJCA & S+P 500 retested their highs, creating the potential for double tops. Meanwhile, the DJTA, Russell 2K (2000 stocks) and NYA (2000 stocks) rebounded to lower highs – reinforcing the monthly & weekly cycle peaks of late-Jan.
(On a side note, this reinforces a similar situation that arose in 3Q ’18 when the FAANG stocks plus MSFT accounted for a dramatically-disproportionate percentage of the overall market’s gains. Recent weeks/months have seen a return of that pattern.
If those stocks merely returned to an average percentage of gains for their industry, even though they would still be showing strong gains year-over-year, it could have a significantly negative impact on the overall market – similar to 4Q ‘18.)…
If the Transports can give a daily close below 10,570, it would project a decline into Feb. 26 – 28 (180 degrees/6 months from their Aug. 27/28 low and the culmination of multiple daily high-high-low and low-low-low Cycle Progressions). That would perpetuate the 12 – 14 week low-low-low-low Cycle Progression that timed the early-Dec. low.
The DJTA continues to be the weakest index and appears to be leading a new reversal with this past week’s action. It often takes additional time for the other indexes to follow suit, so the majority of any sell-off could wait until after mid-Feb.
All of the indexes fulfilled the initial potential – for a sharp sell-off in late-Jan. (based on the 2-Year Cycle) – but subsequent action is ushering in the potential for a new, and potentially larger, sell-off to follow. It would take several more days to validate that potential.
Ultimately, they should give a daily close below [reserved for subscribers]”
Stocks are fulfilling the 2-Year Cycle and project a 2 – 3 week bounce before a sharp sell-off in late-Feb. An ominous 4-Shadow Signal concurs and warns that a much larger sell-off is on the horizon. DJTA projects sharp sell-off after mid-Feb… stretching into Feb. 26 – 28.
What Do Transports Project for Feb. 17 – Feb. 26 – 28?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.