Stocks Enter ‘Danger Period’! Russell 2000 Signals Multi-Month Peak & Sell-off.
08/05/23 – “Stock indexes peaked and reversed lower, turning daily trends (and some intra-month trends) down in the process. That initially validates intermediate cycle highs and the potential to enter a negative period in late-July/early-Aug ’23. A vulnerable period extends into late-Aug ’23…
Stock Indices entered the late-July/early-August ‘danger period’ and began to sell-off, with each one turning its daily trend down… but need to reinforce that by turning their intra-month trends down (the DJIA & S+P 500 are the only ones to have turned their intra-month trends down, so far).
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. It has since sold off but needs the intra-month trend to turn down in order to validate that peak.
Coinciding with that peak, the Russell 2000 reached its 3 – 4 month upside targets (stemming from its March ’23 low) at 2000 – 2015/QRU.
As described over the past month, the Russell had been targeting a new rally into July 24 – 28, ’23 – the fulfillment of a ~6-week low-low-high-(high) Cycle Progression, successive 18-week advances, and a 25-week high-high-(high) Cycle Progression.
The Russell 2000 attacked its monthly LHR in June ’23, reinforcing the likelihood for a subsequent peak in July or Aug ’23. If that high was just set, it would fulfill a 20-month low-high-(high; July ’23) Cycle Progression in the Russell, DJTA, S+P Midcap 400, and many stocks…
At the very last, these corrections should last into mid-Aug ’23 and could stretch later in the month… and possess the potential for a sharp spike down.
Stock Indices turned negative on a near-term basis as they fulfilled upside price targets & cycles and then quickly turned their daily trends down in the ensuing sell-offs. The DJIA & S+P 500 also turned their intra-month trends down – projecting declines to monthly support and/or into mid-month. The NQ-100 needs a daily close below 15,339/NQU to follow suit.”
Stock indexes are fulfilling ongoing analysis for multi-month peaks to take hold in late-July/early-Aug ’23 and enter a vulnerable ‘danger period’ that could/should spur sharp sell-offs. As it did in Nov ’21, the Russell 2000 could be leading this transition 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 lower into the second half of Aug ’23. A subsequent bounce into mid-Sept ’23 would then usher in a second, more significant ‘danger period’.
Is the Russell 2000 the ‘Canary in the Coal Mine’… or Just an Outlier?
What is the significance of Monthly 21 & 40 High MACs being tested and held?
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.