Stock indices point lower into a cycle low date due today +/- a trading day. The leading indicator – seen in the chart below with the Dow Jones Average – called for top on the 6th of August a day before the Dow made its closing price high. The leading indicator is still pointing lower with no signs of a reversal. With the e mini Russell failing to follow through with its positive breakout, a test of the mid July lows is called for. The success or failure of this probe toward the lows will be the key for bigger picture going into the autumn of the year. With cycles pointing up after midweek, the market should have told us what we need to know by Wednesday. In either event, cycles should move prices higher after mid week or at least make way for a partial recovery of the decline from the peak on the 6th.
