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Navigating Intermediate Stock Market Cycles: June 2024 Market Outlook and Strategies

Updated: Jun 14

Market Commentary/Forecast - June 6, 2024

When markets bottom and transition into a full-fledged long and intermediate market cycle advance, a daily heatmap typically turns almost entirely green. This indicates that institutional traders are buying nearly all stocks across major indices. That scenario was observed after last October’s deep low on the long and intermediate cycles, although the energy sector initially did not participate.






Current Market Situation

Stock Market Cycles
November 2023 Stock Market Heatmap

Presently, markets have not reached that kind of deep turning point low. However, while long and intermediate cycles are turning up again, we are once more witnessing broader-based institutional buying, albeit to a lesser extent. Based on projected cycles, the current advance should peak around June 14. This will likely be followed by another pullback into the end of the month. After this decline, another stronger cyclical advance is expected through July, as shown in the Visualizer charts.




Market Cycle
June 2024 Stock Market Heatmap


Strategic Trading Recommendations

For the near term, investors should consider staying in this upside using stops under a 2/3 and possibly a 3/5 crossover average for protection. Today, momentum cycles are deep in the upper reversal zone and are expected to retreat. This means we could see markets stall or pull back to their 3- or 5-day moving average for a day or two. That pullback can be a swing trade buying opportunity as long as daily lows stay above those levels.

Long-Term Cycles

Long-term cycles are decisively resuming an upward trajectory, signaling growing market optimism. This indicates that the broader market trend remains bullish, providing a favorable environment for long-term investments. Investors should look for opportunities to enter long positions during pullbacks and hold these positions as long as the long-term cycles continue to rise.

Intermediate Cycles

Intermediate cycles are currently stabilizing and are expected to turn upward, helping lift markets toward the next projected peak on June 14th. This intermediate uptrend provides a window of opportunity for swing trades. Investors should monitor these cycles closely to capitalize on short-term gains.

Short-Term Cycles

After bottoming out on May 30th, short-term cycles have steadily risen, indicating positive near-term momentum. This short-term bullish trend supports the strategy of entering swing trades during minor pullbacks and riding the uptrend until the projected peak.

Crossover Averages and Heat Maps

Crossover averages confirm a growing but minor bullish trend developing. Daily lows are holding above all four crossovers, indicating that buying pressure is building, while heat maps show how that buying is gradually turning more broad-based. This broader buying activity suggests increasing confidence among institutional traders, which bodes well for the continuation of the current uptrend.

Risk Management

This short-term bullish window can provide a reasonable opportunity for long-position swing trades. However, risk management is critical—use tight stop-loss orders under a 2/3 crossover to protect your capital. Remember, this rally is unfolding against a backdrop of Fed policy uncertainty, and the FOMC announcement on June 12th has the potential to quickly reverse market sentiment. Interest rates and forward guidance may not be what traders hope for, especially considering a cyclical decline is projected after June 14.

Market Projections and Strategy

June 14: Anticipated peak of the current advance. End of June: Expected pullback phase. July: Stronger cyclical advance expected.

Investors should stay vigilant and monitor these key dates and indicators to adjust their strategies accordingly. The projected peak on June 14th suggests a window for swing trading opportunities, while the anticipated pullback at the end of June offers a chance to reassess and reposition for the July rally.

Importance of Understanding Market Cycles

Understanding market cycles is crucial for successful trading. By analyzing long-term, intermediate, and short-term cycles, traders can identify optimal entry and exit points, reducing the risk of significant losses and maximizing potential gains. Market cycles provide a framework for anticipating market movements and making informed decisions.

Utilizing Market Turning Points Tools

Market Turning Points provides advanced tools and insights to help traders navigate these cycles effectively. Our Visualizer charts, forecast models, and crossover averages offer valuable information on market trends and potential turning points. By leveraging these tools, traders can enhance their decision-making process and achieve more consistent results.

Practical Trading Tips

Stay Informed: Regularly review market updates and forecasts to keep abreast of potential turning points and market trends. Use Layered Stops: Implementing layered stop-loss orders can help protect your investments by gradually reducing exposure as prices decline. Focus on Key ETFs: Concentrate your efforts on a few high-performing ETFs rather than spreading yourself too thin across many options. Participate in Webinars: Join our weekly webinars to gain insights and ask questions directly to enhance your trading knowledge. Utilize Educational Resources: Take advantage of our instructional videos and daily forecasts to stay informed and make educated decisions.

Conclusion

As markets navigate these intermediate cycles, traders should focus on the upcoming minor rally while preparing for the projected pullback later in the month. Utilizing strategic stops and closely monitoring market indicators will be crucial for successful trading during this period. By leveraging the insights from our forecast charts and managing your stops effectively, you can navigate this volatile period with confidence.

For more insights and to take advantage of our predictive tools, visit Market Turning Points and subscribe today. With our unique time-based approach to the stock market forecast, you can achieve more consistent and profitable trading outcomes.

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