Stocks Signal New Decline
09/24/16 Weekly Re-Lay:
“Stock Indices bounced after fulfilling analysis for a quick, sharp sell-off on Sept. 7–14th. They remain in the midst of what was expected to be a 1–2 month decline, beginning immediately after August 1–12th, the latest phase of the 32–33 Week & 66-Week Cycle highs. The DJIA & ESZ need to turn their weekly trends down, ideally on Sept. 30th, to confirm that scenario.
Traders should have sold Stock Indices near recent highs & be holding DJIA & ESZ short positions…
Stock Indices continue to roll over in what was/is expected to be an initial 1–2 month decline (from mid-August). The DJIA provided some additional corroboration to that outlook, bouncing to the following critical swing or resistance points and then quickly reversing back down:
— Month-opening range & Aug. ’16 close.
— Weekly 21 High MAC.
— Weekly trend-neutral point.
— Daily 21 MAC & 21 MARC resistance.
More important, at least from a short-term perspective, the DJIA & ESZ (and several other Indices) provided a textbook daily trend sell signal – rebounding far enough to twice neutralize the prevailing daily downtrend… but then immediately reversing back down without turning that trend up.
That projects a drop back to the Sept. lows, a scenario reinforced by each of the other four factors just cited. If fulfilled, that would also fulfill expectations for a downward Intra-month X-X, with the intra-month high set in early-Sept. & the intra-month low set in late-Sept. The weekly trend patterns are still set up to corroborate that…
The current week provides the 2nd potential for the DJIA & ESZ to reverse their weekly trends down. It would take weekly closes below… [See complete 9/24/16 Weekly Re-Lay for details]…
Stock Indices peaked along with an 11 trading-day high (7/25)–high (8/9)–high (8/23)–high (9/08)–high (Sept. 23rd) and an overriding 21–22 trading day high (6/24)–high (7/25)–high (8/23)–high (Sept. 22/23rd) Cycle Progression. That should prompt a drop into month-end.
1–3 month & 3–6 month traders & investors should have sold Stock Indices on Aug. 29–Sept. 7th (~18,400–18,550/DJIA, ~2161–2182/ESZ & ~4775–4830/NQZ) and… [See complete 9/24/16 Weekly Re-Lay for comprehensive trading strategy]. TRADING INVOLVES SUBSTANTIAL RISK.”
Stocks set secondary highs on Sept. 23rd, fulfilling daily cycles & reinforcing expectations for overlapping ‘Danger Periods’following the mid-August peak. Focus remains on late-2016 when 15–18 month topping process (from May/June 2015) is expected to shift into sustained downtrend. That coincides with the most likely time for monthly 21 MACs to flatten & turn down (Dec. 2016–March 2017) as the corresponding monthly 21 MARCs rally to their peaks (see Tech Tip Reference Library for indicator description and interplay between these key numbers).
As a result, Nov./Dec. 2016 could be volatile time as conflicting cycles collide. Latest declines (Danger Period #1 & #2) should culminate in Nov. 2016 as larger-degree sell-off is likely to begin in Dec. 2016/Jan. 2017.