Stocks Reinforcing Jan. 20^th Lows

02/04/16 INSIIDE Track Intra-month Update:   “Stock Indices remain in weekly downtrends, consolidating above their Jan. 20^thlows.  Those lows added synergy to the 2^nd key cycle low of 2016 (June 2016) – coming at the midpoint of the 10-month low-low-(low) Cycle Progression (Oct. ’14–Aug. ’15–Jun. ’16) and creating a corroborating 5-month high-low-low-(low) Cycle Progression(Mar. ’15–Aug. ’15–Jan. ’16—Jun. ’16)…

The Indices were expected to rebound from the Jan. 20^th lows – back up to 16,340–16,630/DJIA, 1936–1968/ESH, 4340–4431/NQH & 9550–9730/NYSE.  Except for the Nasdaq 100, those Indices did test those ranges and set initial highs in the first three days of February.

In doing so, however, the Nasdaq 100 turned its daily trend up in the process (as did the DJ Transports & Russell 2000), increasing the potential for it to reach 4365–4382/NQH.

This is hinting that the Indices are entering another period of volatile consolidation… before the next decline.  Since these declines often unfold in days – as opposed to weeks – that consolidation could stretch beyond mid-month before another ‘shoe’ drops (if new lows are going to be seen in late-Feb.)  In other words, Stock Indices could see an intermediate (3–5 week or longer) high AND low in February – similar to November & December.

That also dovetails with the ~90-degree/12–13 week cycle that has been governing the DJ Transports for the past 15 months. As described in the Feb. ’16 INSIIDE Track, the next phase of that is in the second half of February… when a high is more likely.

Based on the Aug. 24^th low & Nov. 20^th high, the DJTA could produce a secondary/lower high on Feb. 16–19^th …creating a 12–13 week low-high-(high) Cycle Progression… before entering its next wave down.

That does NOT mean all the Indices would spike above recent highs in the coming weeks – since each Index needs to be assessed independently – but it does mean the next sharp decline could wait until that time frame before taking hold.

The Transports could be rallying back to key resistance at 7350–7450, even as other Indices are vacillating within a more narrow range (and the DJIA, ESH & NQH peaking within their rebound resistance zones).

Once the Transports fulfill their upside potential, other Indices could then drop sharply into late-Feb., retesting their late-Jan. lows.  The key to all of this will be the intra-month trends…

6–12 month & 1–2 year IT Update traders/investors should be on the short side of the Indices  (except for the NQ) since Nov. 6th and should risk a weekly close above the Jan. 4–8, 2016 highs (17,405/DJIA, 2043.5/ESH & 10,039/NYSE).…”   TRADING INVOLVES SUBSTANTIAL RISK.

DJ Transportation Average projecting February rally to 7350–7450.  Volatile consolidation (including new lows in some Indices) should accompany this rebound.  Specific indicators – like the weekly trend pattern & weekly 21 MAC – should reveal what to expect afterFeb. 19^th!