Stocks Confirming January 22nd Cycle Highs; Project Major Feb/March ‘25 Sell-off!
01/29/25 – “Stock indices started the week with an abrupt sell-off, concentrated primarily in tech stocks, on the heels of DeepSeek revelations. It always takes a fundamental event to validate technicals & cycles… and that may have been the first of many.
Stocks are in the midst of a multi-week congestion period, having fulfilled expectations for a 1 – 3 week reactive rally in fulfillment of their weekly trend patterns and related 4-Shadow signals triggered on January 10/13th. Before elaborating on recent action, overall context is critical…
The weekly trend reversal & the 4-Shadow indicator both signal an imminent initial low and the onset of a quick, sharp multi-week reactive rally before a more significant decline subsequently takes hold. To review the 4-Shadow indicator:
“There are two simple techniques that often warn of an impending reversal. Both deal with the final corrective move before the end of a trend. They usually identify the final corrective move – before a final rally (and subsequent high) – while foreshadowing what is likely to come.
For a valid 4-Shadow signal, a market will exceed both the duration and magnitude of the preceding correction – warning of an impending top… This ‘warning sign’ is an omen of a terminating trend.
The ensuing action – after the 4-Shadow signal has been generated – can take three basic and relatively similar forms. The most common involves a market matching and/or barely surpassing previous highs but falling short of the magnitude of previous recent rallies.
While this shows additional strength on a near-term basis, it warns of an impending peak. In all cases, the market experiences a final rally after the 4-Shadow signal is generated.”
This was reinforced by the DJIA, S+P Midcap, Russell 2000 & DJTA bottoming at their October ’24 lows – pivotal 2 – 3 month support levels that often hold during their first test.
At the same time, the S+P Midcap reached its 10% decline threshold – another common place/time for a reactive bounce to unfold. That reinforced an initial multi-week low was taking hold on January 13th.
Most indexes rallied to monthly resistance levels by/on January 24th – the upside targets for their intra-month uptrends – as they fulfilled intermediate cycles.
The S+P Midcap – which has been leading most reversals since early-October – was projecting a rebound peak on January 22/23rd that would fulfill a 58 – 59 day high (June 3) – high (July 31) – high (Sept 27) – high (Nov 25) – (high; Jan 22/23) Cycle Progression.
It topped on January 22nd.
That cycle was instrumental in projecting the Oct/Nov ’24 surge and a related multi-month cycle peak for November 22/25th. A peak on January 22nd – the ideal scenario – was forecast to ‘likely trigger a decline into the middle half of February ’25’…
Not surprisingly, the DJTA tested its weekly 21 High MAC (on Jan 24th) while rebounding 50% and attacking a multi-week range-trading target. It is again testing that 21 High MAC and could produce a very bearish pattern IF it sold off and closed below xx,xxx/DJTA on January 31st.
Once again, however, it is the S+P Midcap that could be leading a new reversal lower. It rebounded .618 (of its initial decline) and peaked in perfect sync with cycle highs on January 22nd.
It has since sold off and just generated an outside-day/2 Close Reversal lower today. It needs a daily close below xxxx/IDX to turn a trio of indicators negative… and could do so tomorrow.
It would take daily closes below [reserved for subscribers] to give the next signs that a secondary top is taking hold.” TRADING INVOLVES SUBSTANTIAL RISK
Stock Indexes are adding corroboration to major peaks projected for late-Nov ’24 – set on November 22/25th while fulfilling repeatedly-published cycles and major upside price targets. That ushered in what was projected to be 3 – 6 month (or longer-lasting) peaks in late-Nov. ’24… and to ultimately lead to major 2025 plunges as part of a major setback in equity markets.
Subsequent highs – particularly in the S+P Midcap 400 – were projected for ~January 22nd and expected to prepare the way for sharper declines in February ’25, a possible March Meltdown… and confirmation of a broader stock market (seismic) shift. That is in sync with weekly trend and multi-month 4-Shadow signals triggered on January 10/13th. Many indexes peaked precisely on January 22nd!
The 17-Year Cycle projected 4Q 2024 as the most likely time for a major peak in equities – and 2025 as the time for the next major decline. In line with that, the DJIA is already revealing eerie parallels to late-2007/early-2008 and providing a roadmap for future expectations. Cycles and timing indicators are already identifying the next likely time frame when a future sharp sell-off is likely… in February/March ‘25 (see publications for details).
Do January 22/23rd (Divergent) Highs Reinforce Outlook for ‘March Meltdown’?
How Would Late-Jan/Early-Feb Peak Reinforce 1Q ‘25 Bearish Outlook?
What Do Weekly Trend & 4-Shadow Signals Bode for February/March ‘25?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.