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08/19/17 – INSIIDE Track Intra-month Update: Stock Indices are reinforcing the Decennial Danger Period and the outlook for an (initial) sharp decline from late-July into late-August. That cycle was corroborated by the Indices reaching multi-year upside objectives – and the ideal wave targets for a ‘5th’ wave peak – at the same time they reached weekly extremes.
As they entered this Danger Period, many Indices produced late-July & early-August reversal signals with the S+P 500 triggering a 1–4 week sell signal near its highs – at 2473–2484.5/ESU (see Weekly Re-Lays). Corroborating those signals, the ESU & NQU gave outside-week/2 Close Reversals lower as the DJIA & ESU neutralized their weekly uptrends, projecting more downside in the coming week(s).
This 10-Year/Decennial Cycle has timed major stock market sell-offs in the ‘7’ year of the decade during the majority of the decades since 1837. And, the majority of those declines took place during the July–November period of those ‘7’ years.
August 2017 was forecast to see a similar sell-off, with the late-July reversals projecting a quick, sharp drop into August 18 – 22.
The Indices followed short-term analysis – for a bounce from Aug. 11 into Aug. 15 or 16 – fulfilling the Nasdaq 100’s daily trend pattern, and then resumed their declines. Several Indices (Russell 2K, NQ-100, NYSE) rebounded right to their daily trend neutral points, remaining negative throughout these rebounds & reinforcing the likelihood for a new drop into Aug. 18 – 22.
That scenario was corroborated by the daily 21 MARCs in the ESU & NQU, which prompted the daily 21 MACs to flatten & turn lower, mid-week. That was another signal that a quick drop was imminent. That drop took place on Aug. 17 & 18, fulfilling the minimum downside timing for this decline.
The Russell 2K remains negative & continues to lead this decline since peaking in late-July & perpetuating a 6-week/40–44 day high-high-high-high Cycle Progression. That projected a drop into Aug. 18 – 22, the latest phase of a 13–14 day high-high-high-high-(low) Cycle Progression.
The Russell did drop into Aug. 18 – 22 & also perpetuated an ongoing ~30-degree & ~90-degree cycle in the process. More significantly, it ended the week by turning its weekly trend down (a lagging & confirming indicator). This mini-meltdown has shaved over 100 basis points off the Russell 2000 while taking it to the lower extremes of an 8-month trading range.
This decline could extend into the coming week, particularly since the DJIA & ESU are now in a position to turn their weekly trends down (with weekly closes below 21,641 & 2419.5). The coming week’s HLS levels are near monthly HLS levels, creating an extreme target range for the next 1–2 weeks at 21,023–21,103/DJIA & 2350.5–2359/ESU. The NQU does not have the same synergy (between monthly & weekly extremes), placing initial focus on 5572–5575/NQU – the weekly HLS levels.
Bonds & Notes remain in weekly & intra-year uptrends after pulling back and neutralizing those weekly uptrends (but not turning them down) a few weeks ago. That pattern projects a rally to new intra-year highs, ideally in the coming weeks.
That could be seen in the coming days, during the second week of a 1–2 week period in which Bonds could perpetuate a 7–8 week low-low-low-low-(high) Cycle Progression (Aug. 14 – 25).
Reinforcing that is an 8–9 week low-high-high-high-(high) Cycle Progression that also recurs on August 14 – 25 and also projects a high.
From a price perspective, Notes are still targeting 127-08/TYU as a minimum upside objective. The monthly LHR for August is at 127-10/TYU. Weekly LHRs, however, are trending higher and could allow for a spike up to 128-03–05/TYU – the level of the latest two LHRs – if an extreme upside spike unfolds.
Bonds have a corresponding range at 159-05–159-17/USU, that could also be tested if an extreme upside spike occurs.
The Dollar Index rebounded and tested its weekly trend neutral point (and daily 21 MARC resistance), before reversing lower & selling off into week’s end.
That leaves wide open the potential for a spike to new lows (below 92.39/DXU) that could test the two latest weekly HLS levels at 92.02–92.10/DXU. That would take it very close to the low extreme of its ~2.5 year trading range – at 91.88/DX. From a broader perspective, the Dollar Index would still not show a negative breakdown until a weekly close below 91.88/DX.
The Euro, in contrast, dropped right to weekly support & its daily HLS as its daily trend remained positive. As a result, the Euro maintains the potential to spike up to its weekly LHR levels – a pair of which are now at 1.1985–1.2008/ECU (just below monthly resistance).
The Euro is bumping up against the high of its ~2.5 year trading range but would not signal a breakout to the upside until a weekly close above its Aug. 2015 peak of 1.1863/ECU.
The Yen pulled back to its intra-month support & immediately reversed higher, rallying back to its recent high. It remains capable of peaking in this time frame, the latest phase of a 12-month/360-degree low–high–(high) Cycle Progression. A slightly smaller low (Dec. ’16)–high (Apr. ’17)–high (August ’17) Cycle Progression is projecting the same thing. Weekly LHR levels could spur a spike above .9400/JYU.
For almost 5 months, the Yen has been locked in the trading range it set between mid-March & mid-April. If it fails to accelerate higher now, the Yen could pull back into Sept. 8 – 11. The Yen would need to give a daily close below .9021/JYU to turn the intermediate trend negative and confirm a multi-week peak.
Gold & Silver surged into weekly cycles and the time frame when the weekly trend patterns augured a multi-week top. Gold fulfilled its daily trend pattern, retesting its highs and forming a triple top at ~1307.0/GCZ. Gold rallied right to its monthly resistance and reversed lower, while Silver peaked a few cents shy of its corresponding monthly resistance. This could usher in a multi-week peak at any time.
At the same time Gold set a third equal peak (triple top), Silver set a third descending peak (and the XAU set the 6th consecutive lower high). That reinforces the ongoing divergence, which is likely to continue into late-2017 – with gold stocks remaining the weakest of the three.
Gold remains the most bullish, continuing in an intra-year uptrend, monthly uptrend (since Jan. ’17) and an uptrend basis its weekly 21 MAC. Another spike high is possible in the coming days, but some signs are beginning to point to a top. That also aligns with weekly & monthly cycles…
Gold & Silver were expected to produce another high in mid-August, the latest phase of another 4-month cycle. That ~4-month cycle has governed Gold in 2014–2017, often at both extremes (between highs and lows).
One phase of it timed a low in late-2016 and the subsequent high. Gold rallied for 4 months – from mid-Dec into mid-April ’17 – and was projected to produce a subsequent high in mid-August ‘17 (low-high-high Cycle Progression).
That cycle is the same as a 17-week low-low-low-low-high-(high) Cycle Progression in Silver – dating back to its late-2015 bottom – that projected a high on Aug. 14–18, 2017 (+ or – 1 week).
The latest phase of that ~4-month cycle in Gold is an 18-week low-high-(high) Cycle Progression that projects a peak on Aug. 21–25… which is one reason an additional spike high is still possible.
Silver failed to turn its weekly trend up, increasing the likelihood for a peak at this time.
Gold turned its weekly trend up, also portending an intermediate high on August 14–18 (or Aug. 21–25, at the latest). The difference is what this reveals for 4Q 2017… when Gold should rally to new 6–12 monthhighs.
The XAU remains in congestion after completing its drop from July 26th into August 7 – 11, when cycles projected the latest low, and then seeing a rebound back up to its month-opening high & weekly 21 MARCresistance. It immediately reversed lower, creating an outside-day/2 Close Reversal lower on Friday (in line with weekly cycles in Gold & Silver).
The XAU also began to turn its weekly 21 MAC back down – something that should begin to exert negative pressure in the coming week(s). The next intermediate cycle low appears around Sept. 11, the latest phase of a 60-degree/2-month low-low-low-(low) Cycle Progression.
Soybeans, Corn & Wheat have entered the time when an intermediate bottom is more likely – based on weekly & monthly cycles as well as trend patterns.
Wheat dropped into the latest phase of a 16–17 week low-low-low-low-low-low-low Cycle Sequence – when a bottom has been expected. That weekly cycle extends into Aug. 25, so a low could take hold at any time.
Meanwhile, Corn is nearing a 360-degree cycle that links its late-Aug. ’15 low weekly close & its late-Aug. ’16 low – projecting a similar (multi-month) low in late-August ’17.
Soybeans corroborate both of those grains, projecting a low (ideally, that low would be a double-bottom & leave intact related cycles that were fulfilled in June 2017) in August ’17…
An August ’17 low would perpetuate a ~12-month/~360-degree high (Aug./Sept. ’12)–low (Aug. ’13)–low (Sept. ’14)–low (Aug. ’15)–low (Aug./Sept. ’16)–low (Aug./Sept. ‘17) Cycle Progression. It would also fulfill a 7-month low (Nov. ’15)–high (June ’16)–high (Jan. ’17)–low (Aug. ’17) Cycle Sequence.
The days surrounding Aug. 23 combine daily cycles & an intermediate 2-month/ 60-degree low-low cycle, increasing the potential for a multi-week bottom in that time window.
Crude Oil, Unleaded Gas & Heating Oil are rebounding after dropping to monthly support and, in the case of Crude, the weekly 21 Low MAC. That support spurred an initial rebound but the daily trends cannot turn up until Aug. 22, at the very earliest. So, consolidation should remain intact.
Crude’s early-August peak is still expected to hold… although a retest is possible. The weekly resistance, 21 High AMAC, 3 High MARC & LHR (50.48/CLV) converge near the recent peak. The weekly trend remains neutral and would not turn positive until a weekly close above 50.51/CLV.
As long as that weekly trend does NOT reverse to up, Crude would remain on track for a drop back to its June low, leading into Sept. 2017.
Natural Gas is consolidating and would not turn its daily trend up until a daily close above 3.027/NGV. That leaves open the potential for a drop back to recent lows in the coming week(s).
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