Stocks Reversing Lower, Focus on June 17/18th for Next Pivotal Low.
05/18/24 – “Stock indexes have rallied beyond expectations but most are still tracing out what appears to be ‘b’ wave advances (prior to ‘c’ wave declines into June 17 – 28th). They are providing the usual divergence with weaker indexes peaking at lower highs while fulfilling intra-month uptrends…
Stock Indices remain in the second stage (a multi-week reactive rally from the April 19th lows) of what was/is expected to be a 2 – 3 month correction after fulfilling multi-year upside price targets & cycles in all six indexes in 1Q 2024.
In Elliott terms, they are in a likely ‘b’ wave bounce, preparing for a ‘c’ wave decline. However, the ‘b’ wave rally has exceeded expectations and pushed equities to extremes (of ‘b’ wave norms). If that wave structure was to remain a possibility, the S+P 500 needed to close this past week below the prior peak of 5333/ESM. It closed at 5327/ESM.
The S+P 500 has initially held the upper extreme of its monthly resistance, its recent peak AND a pair of recent weekly LHR levels (extreme upside targets on a 1 – 2 week basis) – at 5326 – 5329/ESM.
In the case of the DJIA & NQ-100, the recent spike (new) highs fulfilled their weekly trend pattern signals following the April 19th lows… when they failed to turn their weekly trends down. On May 3rd, the DJIA re-entered its weekly uptrend.
Their intra-month uptrend signals projected rallies into (at least) mid-month and up to (at least) monthly resistance ranges, reinforcing the 1 – 2 week bullish signals triggered during ‘Decision Days’ on May 2nd and May 6th. Most set their highs or highest closes on May 15th, fulfilling those intra-month trends.
Reinforcing that, the Russell 2000 rallied into the latest phase of a ~1.5-month high-high cycle that has timed multi-week highs in late-Sept, mid-Nov. & late-Dec. ‘23 and then mid-Feb & late-March ’24… projecting a future high in mid-May 2024.
The Russell 2000 just rallied into mid-month and mid-week, testing its weekly resistance (2122 – 2139/QRM) and a myriad of daily upside targets (2120 – 2132/QRM) that included three daily LHRs.
Most indexes remain focused on June 17 – 28th for the next multi-month low. The DJTA reinforced that with its latest high. If it now declines for ~34 days/~5 weeks (the duration of its ~April decline), it would bottom around June 17/18th – coinciding with a ~30-degree/~1-month cycle timing lows on Jan 17, Feb 20, March 18/19 and April 17/18th.
1 – 3 month & 3 – 6 month traders could have exited a portion of long positions in March, anticipating a sell-off that could stretch into/past mid-June 2024. TRADING INVOLVES SUBSTANTIAL RISK!
1 – 5 Day Outlook:
Stock Indices remain in daily & intra-month uptrends but have fulfilled the objectives for those trends and could trigger a reversal lower at any time.”
Stock Indexes are retesting intra-year highs and poised for a new decline in the second half of May 2024. Divergent lows are expected in late-May and mid-June – the time when a multi-month bottom is most likely in most indexes – before rallies into July ‘24.
The stronger NQ-100 remains positive (see related 17-Year Cycle analysis and what that could mean for July & October 2024) and could/should adhere to the general intra-year parallel to 2007 (successive highs in 1Q, July, and then October ’24… similar to 2007). The DJTA is increasing the potential for a multi-month low in mid-June ’24 (June 17/18th = greatest synergy of cycles for a bottom) – in line with a powerful convergence of cycle lows in that index.
How Long Could Mid-June ’24 Cycle Low Hold?
How Does This Correspond to 17-Year Cycle of Stock Peaks Likely in July & October 2024?
Does This Corroborate the Projected 2025/26 Recession Cycle?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.