Stock Indexes Enter New Natural Year; Russell 2000 Signals Late-March ’23 Bottom.

03/29/23 Weekly Re-Lay Alert – “It’s the time of year, again, to review a very critical and decisive period in our world. This period was reinforced as several markets/complexes – including precious metals, currencies & bonds – completed intermediate surges (as others retreated) into the week of March 20 – 24, ‘23 – when weekly cycles converged.

On its own, that may seem inconsequential.  However, it has the potential to become significant as the next ~3 weeks unfold.  The reason for this has to do with what is described as the first month of the Natural Year.  It is the first ~30-day period following the Vernal Equinox… and holds great significance for the ensuing ~11 months of that Natural Year (until Vernal Equinox 2024).

Opening Range

For those that view the calendar from a ‘natural’ standpoint (as most agricultural-based societies do), this period kicks off the 1st month of the Natural Year in the N. Hemisphere – beginning with the vernal equinox (March 20, ‘23).  However, it is often the end of that ‘month’ that is most important… for multiple reasons.

If one were to begin a calendar on the vernal equinox, the first month of that year would end on April 19/20.  It would be the ‘opening range’ for that Natural Year; a determining factor for the ensuing intra-year trend.

Why? 

The Sun governs our seasons, which are measured by the solstices and equinoxes.  It also has a dramatic impact on our overall lives, not to mention the influence of something like the Sunspot Cycle (which has already had an oversized impact on events in and out of the markets since Solar Cycle 25 began – in lockstep with Covid-19 – in Dec 2019).

This has been true in farming/ag-based societies for thousands of years.  It has been true in civilizations that worshipped the Sun (and established their calendars based on that focus) – much of which is still prevalent in our modern-day calendar.

As such, the vernal equinox starts the clock on the ‘opening range’ of each Natural Year.   

It is when the northern half of the earth transitions from seasonal ‘death’ to ‘life’.  In the old days, it was also when ‘kings went off to war’ (coming back to life just in time to go perpetrate death; 2022 reaffirmed that).

From a trading standpoint, the action in that first 30 days represents a type of ‘opening range’ that would influence the trading of the rest of the Natural Year.  This is similar to how I treat the first 3 weeks – and month – of the calendar year, the first 3 trading days of each month, and the first day of the week.

Once that opening range (first 30 days) of the Natural Year is complete, you have resistance and support for the entire period – both when the market is trading in that range AND once it has broken out of it.

You also have an important gauge of trend for that year (if the market is trading above that range, it is in an uptrend on an intra-year basis, etc.).

In many ways, April 19/20 acts like a deadline for determining what to expect in the coming (Natural) year. As I have discussed for the past three decades, that time (surrounding April 19) is what I term the Date of Aggression… a dangerous and volatile period.

In 2022, it was projected to time 3 – 6 month (or longer) peaks and trigger abrupt sell-offs in both stocks and gold.  The DJIA & Gold precisely fulfilled that analysis and have still NOT returned to the highs set during that decisive week.

In contrast, 2020 provided the opposite with the entire stock market, most metals and many commodities bottoming on March 18 – 23, 2020 and beginning new bull markets from there.  In 2021, stocks began a second intra-year rally in late-March and the originating lows became pivotal support that was tested multiple times in some indexes (like DJTA & Russell 2000).

The key takeaway involves what occurs during that initial ‘month’ and what the markets reveal about the ensuing 11 ‘months’ of that new Natural Year.

Stock Indices remain on track for a(nother) surge leading into the opening days of April ‘23.  On March 20, the Russell 2000 spiked to new 5+-month lows and to its lowest level of 2023 (down about 3% on the year).  It set its lowest daily close on March 23 and retested the intraday low on March 24, quickly reversing higher.

That is another powerful validation to the influence and impact of the start of Natural Year 2023/24.  The Russell 2000 perpetuated a ~3-month/~90-degree high (Mar ’22) – low (Jun ’22) – low (Sept ’22) – low (Dec ’22) – (low; late-March ’23) Cycle Progression AND bottomed exactly 3 years from the 2020 lows.

The DJTA did the same, perpetuating a 3-month/~90-degree low (Sept 23) – low (Dec 22) – (low; March 24) Cycle Progression and has the potential to rally into April 17 – 21 when it would perpetuate an ~11-week high-high-(high) Cycle Progression and complete a .618 rebound in time (47 weeks down, 29 weeks up).  That could provide a perfect validation to Natural Year cycles.

For now, the NQ-100 remains the leader – on track for a surge from March 13 into April 3 or 4 after fulfilling the outlook for a pullback to ~12,600/NQM.  A rally into next week would fulfill a ~2-month/~60-degree high-high-high-(high) Cycle Progression with its initial upside target at ~13,200 but a more likely objective at 13,500 – 13,800 (with a possible spike above 14,000/NQM).”

Stock indexes remain on track for projected surges above 13,800/NQ & 4300/ES.  Reinforcing this outlook, the Russell 2000 – which has been the weakest index in recent months – fulfilled multi-month cycle lows and portends a subsequent ~3-month rally into mid-to-late-June ‘23.  It is bottoming in perfect sync with the onset of the new Natural Year and likely to follow a textbook scenario – in which a low around March 20/21 (Vernal Equinox) sets the tone, trend, and trading range for the ensuing ~year.

That dovetails with projections for the NQ-100 and S+P 500 to still see additional surge(s) in 2Q ’23.

How Did 1Q ’23 Action Validate 4Q ’22 (Bullish) 4-Shadow Signal?

What Does Russell 2000 ~3-Month/~90-Degree Cycle Progression Portend for 2Q ‘23?

How Soon are Projected Tests of ~14,000+/NQ & ~4300 – 4350/ES Likely?

Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.