Stocks Vulnerable into Nov. ‘16
08/31/16 INSIIDE Track:
“Stock indices – in 2015/2016 – continue to validate expectations for a repeat of (resembling) 2000/2001 with volatile swings in both directions. Late-June cycle lows project a subsequent low in Nov. 2016…
Stock Indices fulfilled the upside potential triggered by the late-June cycle low, when a multi-month bottom had been forecast – the latest phase of ~5-month & ~10-month low-low cycles that had been the focus of 2016 analysis.
The late-June low now creates a very consistent sequence of multi-month lows in late-Aug. ’15, late-Jan. ’16 & late-June ’16… that could time an ensuing low in late-Nov. 2016.
That late-June low was projected to spur a sharp rally, with the DJIA expected to surge from key support (~17,100) to a convergence of 1–3 month & 3–6 month objectives at 18,600–18,700. From there, the Indices were expected to turn back down – and enter a new ‘Danger Period’ – after passing through the latest phase of an uncanny cycle…
32–33 Week Cycle
In recent years, this recurring 32–33 Week Cycle was discussed in 2013 – projecting a final, accelerated advance into late-2014 – and since then, identifying a series of Danger Periods when sharp setbacks were anticipated. Those Danger Periods have escalated in intensity, first timing a quick, sharp correction from early-Sept. into mid-Oct. 2014… and then (along with the corresponding 66-Week Cycle) pinpointing the late-April-through-late-August 2015 decline.
The ensuing phase – in mid-Dec. ‘15 – timed the quickest/sharpest drop into yearly support levels in late-January 2016. That projected focus to the next phase of the 32–33 Week Cycle – as well as another phase of the corresponding 66-Week Cycle – in the first half of August 2016.
The accompanying diagram – featured in INSIIDE Track since 2013 and updated accordingly – illustrates where that places Stock Indices in the bigger cyclic picture… and why they are expected to enter a more sustained & convincing decline in late-2016 (and into 2017)…
If so, that would be timed to validate the parallel to 2000–2002, at which time it took the DJIA 15–18 months (after its peak was set in Jan. 2000) to go through a topping process before entering a more sustained decline. Related cycles in the DJIA & DJTA have been pinpointing late-2016 for a similar shift…
Global Indices
China’s Shanghai & Shenzhen Composites extended their rebounds and exhibited a little more near-term resilience than expected. That does not, however, alter the 1–2 year or 6–12 month outlook…
Japan’s Nikkei 225 Index is still in need of a weekly close above 16,939 to turn its weekly trend up (after neutralizing its weekly downtrend multiple times) & confirm a multi-month bottom.
This comes after it set a double bottom in Feb. & June ‘16, twice attacking its 2016 HLS (15,334; extreme intra-year downside target). Its June 2016 low also perpetuated a 2-year high (2Q ‘08)–high (2Q ‘10)–low (2Q ‘12)–low (2Q ‘14)–low (2Q 2016) Cycle Progression AND a 19-week low-low-low Progression (next phase in Oct. ’16).
The German DAX Index fulfilled analysis for a rebound into late-July/early-Aug. – perpetuating an ~8-month high-high-high Cycle Progression & a Golden Ratio, 10 month decline/6 month rebound (.618). This also created successive, 6-month advances… and took hold as the DAX was testing critical 3–6 month & intra-year resistance at 10,485–10,743/DAX…
From a cyclic basis, the overall outlook is for another decline into June 2017 – the next phase of a ~16-month cycle that timed the Oct. ‘14 & Feb. ‘16 lows (and so many other lows in global indices since 2009). The ~8-month midpoint – in Oct. 2016 – could produce an intervening & corroborating low…
The CAC rebounded from its late-June cycle low – the culmination of a ~4-month high-high-(low) CycleProgression – but remains below its year-opening high, a sign of weakness on an intra-year basis. That has also kept the CAC in a monthly downtrend, unable to neutralize that trend during the entire rebound (from Feb. ’16).
On a longer-term basis, the CAC-40 is one of the (technically) weakest Indices and has created a 1-year/~360-degree high-high cycle (Apr. ‘15–Apr. ‘16) that could prompt an overall drop into April 2017. If so, watch the Oct. ‘16midpoint (that is also the next phase of the 4-month cycle – when a subsequent low is expected).” [See complete Sept. 2016 INSIIDE Track for expanded analysis]
Domestic (US) Stock Indices poised for sell-off into next decisive cycle low in Nov. 2016. Nikkei (Japan), DAX (Germany) & CAC (France) portend next multi-month low in Oct. 2016 – and could potentially lead domestic equities in the next bottoming phase. Larger-degree, over-arching cycles project more significant shift in Nov./Dec. 2016 – from the expected 15–18 month topping process (since May/June 2015) into an expected decline in 2017… when 17-Year Cycle should rejoin 40-Year Cycle. Expect volatile action during that multi-month transition phase.