Russell 2000 & 40-Year Cycle
11/29/14 INSIIDE Track: “Stock Indices have fulfilled multi-year expectations and projections for an overall advance into 4Q 2014… ideally into November 2014 and possibly stretching into December 2014 (since a rally into Dec. 6, 2014 would fulfill a precise 40-Year Cycle from the December 6, 1974 bottom).
A stock market peak in 4Q 2014 would complete a 40-year inflationary advance in Stock Indices originating from the 4Q 1974 bottom. As discussed before, that particular cycle could stretch the advance intoDecember 2014.
However, with a cycle of that magnitude, the fulfillment is rarely that precise…And a peak at any time would accurately fulfill the overall outlook – for an advance into 4Q 2014.
Up until now, that has been the key factor – that Stock Indices should continue moving higher (even with multiple intervening corrections) into 4Q 2014… and ideally into Nov. 2014. The Indices have now fulfilled that expectation – whether or not they peak at this time. But, they are ALSO expected to peak in 4Q ‘14.
One of the factors that continues to corroborate that scenario is the growing divergence of successive highs… in different Indices…And, as 2014 has unfolded, the Russell 2000 has created some intriguing cycle & wave relationships that – if they remain intact – could powerfully corroborate the outlook into 2015.
For starters, the Russell 2000 created a very precise 21-week low-high-(high) Cycle Progression, spanning the majority of 2014. More specifically, that was a 147-day low (Feb. 5, 2014)–high (July 1, 2014)–high (Nov. 25, 2014) Cycle Progression.
That sequence was preceded by the early-Sept. 2013 low, 22 weeks before the Feb. 2014 low. And that Sept. ‘13 low was preceded by the April 15, 2013 low – 20 weeks earlier. And that April ‘13 low was preceded by the Nov. 2012 low – 22 weeks prior. And, wouldn’t you know it?! The Nov. ‘12 low was preceded by the June 2012 low – 23 weeks earlier.
Since June 2012, the Russell 2000 has maintained a very consistent, 21-week average (ranging from 20–22 weeks back to Nov. ‘12, with one instance of 23 weeks before that) between key turning points. And, the Nov. 25, 2014 high was the latest phase of that.
21 weeks from the Nov. 25, 2014 high is the week of April 20–24, 2015 (incorporating the April 19th Date of Infamy on that Sunday)…April 2015 is also the next phase of the corresponding, 42-43 week low (Nov ‘12)–low (Sept. ‘13)–high (July ‘14) Cycle Progression…
3-6 month & 6-12 month equity investors should continue to lighten up on long positions as the Indices enter a period when a major top has been anticipated.” TRADING INVOLVES SUBSTANTIAL RISK!