Stocks Trigger 4-Shadow Signal; Portend Second (Sharper) Drop into Late-Feb!
02/06/20 INSIIDE Track Intra-Month Update: “Stock Indexes are still reinforcing a divergent top with the Nasdaq 100 & S+P 500 rallying to new highs, the DJIA & DJ Composite Average retesting their highs, even as the DJTA, NYA and Russell 2000 are well below their Jan. highs.
The DJIA, DJCA, DJTA, NYA & Russell 2000 have validated the potential for an impending peak basis their daily trends (that were unable to turn up). With respect to the intra-month trends, the DJTA, DJCA, NQH, NYA & Russell 2000 did not turn those trends up, even as the DJIA & S+P 500 did. So, divergence remains the name of the game.
The DJIA & ESH intra-month uptrend signals project a rally to monthly resistance – which has already unfolded – so the price aspect of that signal does not have much of an impact. Those signals could also project a rally into mid-month (the timing aspect of that signal), but the other indexes would need to confirm.
The Transports continue to generate revealing, and leading, signals and are increasing the potential for another decline that could last 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 also perpetuate the 12 – 14 week low-low-low-low Cycle Progression that most recently timed the early-Dec. low.
The DJTA continues to be the weakest index and could be leading a new reversal with today’s action. It often takes additional time for the other indexes to follow suit, so the coming days could be decisive.
All of the indexes fulfilled the initial potential – for a sharp sell-off in late-Jan. (that could bottom as early as Feb. 2, 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 Does the 4-Shadow Signal Project – Leading into Feb. 26 – 28?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.