While the medium-term cycle labeling is still not perfectly clear in the DOW and S&P 500, it's possible that both may be completing older cycles now. In fact, the DOW may have completed its cycle with last Friday's low at 26,144, and the S&P 500 with its low at 3,234. The only problem is that last Friday was not in a reversal zone. It would be much better to see those final cycle lows in our new reversal zone (Nov. 5 - 19) That could happen if these indices fall back to make a double bottom formation over the next two weeks. We will watch for that as a possible spot to buy, but if this rally continues to push higher, we may not get that opportunity. We may instead wait for the final top in the new cycle to sell short. That final top may come before the end of the year. For now, we stay on the sidelines as we wait for the resolution of the presidential election results.
The NASDAQ (NASDAQ 100 E-Mini, December contract chart) is a relatively young (new) medium-term cycle that began with the low of 10,656 on Sept. 21. Monday's low at 10,942 may have been a significant sub-cycle low (or even a double bottom to the Sept. 21 low). Either way suggests that this current rally could be quite bullish. We may have to wait for the next sub-cycle dip to buy, but if this rally continues into next week, we may not have to wait long for it to top out in our reversal zone and take a significant correction down. As with the other two indices, it's best to be on the sidelines of this index now as the battle for the U.S. presidency continues.