Stocks Pull Back; Focused on late-Jan./early-Feb for Peak & Sell-off.
01/04/20 Weekly Re-Lay: “Stock Indices have entered what could be a volatile period – when a myriad of competing cycles could spur opposing swings at repeated intervals. The largest cycle is the 16-month (and corresponding 8-month) cycle that projects a peak in Jan. ’20.
A 2-year cycle and a 2-month cycle project focus to early-Feb. ’20 for a potential low even as a related 1-month/30-degree cycle is unfolding now…
Stock Indices remain in intermediate uptrends and have rallied since sharp pullbacks were experienced in the opening days of December – leading to early-Dec. lows. That coincided with the same time that longer-term cycles were projecting a multi-month bottom in the Chinese equity indexes – giving some clues regarding likely (positive) trade developments… which have since materialized. [The Shanghai Comp. surged ~8% from that low.]
Those early-Dec. lows perpetuated a ~2-month (60-degree) cycle during which sharp declines took hold in early-June, early-Aug. & early-Oct. – each time unfolding during the first 2 – 3 trading days of the new month and bottoming just as quickly (without ever turning their intra-month trends down).
On an even smaller basis, equities may have done something similar on Jan. 2 – 3.
However, longer-term cycles project at least a 1 – 2 month peak for Jan. 2020. So, it is important to step back from the 3 – 5 day and 1 – 4 week swings and view the broader context.
A peak in Jan. ‘20 would perpetuate a cycle that was in focus throughout all of 2018 and which helped pinpoint the Sept. ’18 peak in most indexes. Actually, that was a combination of two related cycles – the ~8-Month & ~16-Month Cycles.
Both of those converged in Sept. ’18 and both project subsequent highs for Jan. ’20, with the ~8-Month Cycle also projecting an intervening peak in May 2019.
A peak in Jan. ’20 would fulfill a ~16-month low (Oct. ’14) – low (Jan. ‘16) – low (May ’17) – high (Sept. ’18) – high (Jan. 2020) AND an ~8-month low (Jan. ‘16) – low (Sept. ‘16) – low (May ’17) – high (Jan. ’18) – high (Sept. ’18) – high (May ’19) – high (Jan. 2020) Cycle Progression.
Stock indexes did see a quick sell-off during the opening days of January but the key is whether that drop is complete (and will trigger rallies to new highs). Most indexes spiked down to and held their daily AND weekly HLS levels on Jan. 3, failing to neutralize their daily uptrends. So, at least for now, the trends remain up. It would however, take a daily close above the Jan. 2 – 6 highs (after Monday’s trading is complete) to extend these advances.”
Stock indexes remain in solid uptrends with an uncanny convergence of weekly, monthly & multi-year cycles focused on late-Jan./early-Feb. ’20 – when an uncanny 2-Year Cycle will join the 40-Year Cycle (as well as the 8-Month & 16-Month Cycles) – for an intermediate peak and sharp sell-off. The quick sell-off into early-Jan. ’20 has initially corroborated that scenario and set the stage for an ensuing 2 – 3 week rally into Jan. 20 – 24.
What would a late-Jan./early-Feb. sell-off reveal about 2020?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.