Russell 2K & S+P Midcap Confirming Decisive Peaks! Bounce into mid-Sept ’23 Likely.
08/16/23 – “Stock Indices are steadily selling off after peaking and reversing lower in late-July/early-August ‘23, turning daily & intra-month trends down as a significant ‘danger period’ began. A vulnerable period extends into late-Aug ’23.
From a price perspective, the Russell 2000 & S+P Midcap 400 fulfilled what had projected since April & May ’23 – rallying back toward BUT NOT exceeding their early-Feb ’23 highs. That was immediately followed by the Russell 2000 generating an outside-week/2 Close Reversal sell signal on Aug 4, ’23, projecting a minimum 2 – 3 week decline to follow.
The DJIA spiked higher on Aug 1/2 – fulfilling a ~1.5-month low-high-high-(high) Cycle Progression and a series of ~3-month (90-degree) moves from successive highs on Nov 1/2, Feb 1 & May 1, ’23. (A future high would be expected in mid-Sept ’23.)
Coinciding with that peak, the Russell 2000 reached its 3 – 4 month upside targets (stemming from its March ’23 low) at 2000 – 2015/QRU. Along with other corroborating indicators, that is where the rising monthly 40 High MAC and declining monthly 21 High MAC converged (see Aug ’23 INSIIDE Track for additional analysis and illustrations).
This came after it rallied into late-July ’23 – the convergence and/or fulfillment of multiple timing indicators and cycles. It also fulfilled the monthly LHR indicator as it simultaneously fulfilled a ~6-month high-high-(high) Cycle Progression (13 weeks/90 degrees down & 13 weeks/90 degrees back up) and an overriding 20-month low-high-(high) Cycle Progression.
Since then, the Russell 2000 has sold off & neutralized its weekly uptrend AND its intra-year uptrend – both signs that confirm a multi-week top. This decline has an initial downside target of 1825 – 1840/QRU – where 1 – 2 month support exists.
For the past ~2.5 years, the Russell 2000 has set a multi-week, often multi-month, low every 21 – 22 weeks. That has occurred six straight times and could recur if the it sells off and sets a low… The ideal time (greatest synergy) for that low would be on Aug 18 – 28, ’23… The Russell 2000 weekly trend pattern identifies Aug 21 – 28, ’23 as the ideal time for an intermediate low.”
Stock indexes fulfilled ongoing analysis for multi-month peaks to take hold in late-July/early-Aug ’23 and usher in a 3Q ’23 ‘danger period’ that could/should spur sharp sell-offs. Similar to Nov ’21, the Russell 2000 (& S+P Midcap 400) could be leading this reversal as it fulfilled multi-month upside targets in late-July ’23 while maintaining its intra-year down/neutral trend status – setting the stage for a new multi-month decline.
It also peaked right at is converging monthly 21 & 40 High MACs – the upper ranges for its 3 – 6 month and 6 – 12 month trading ranges… providing many of the ‘ideal’ criteria for a major ‘B’ wave rally to peak and a large scale ‘C’ wave to begin. An initial decline should take it down to ~1825 – 1840/QRU in the coming week(s). A subsequent bounce into mid-Sept ’23 would then usher in a second, more significant ‘danger period’ in equities.
Is the Russell 2000 the ‘Canary in the Coal Mine’… or an Outlier?
What is the significance of Monthly 21 & 40 High MACs being tested and holding?
Is this a ‘Major ‘B’ Wave Peak’ in at least one key index??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.