Fed Triggers Stock Market Bottom: Cycles Project Future Peak on April 18 – 22.
03/16/22 INSIIDE Track Stock Index Update – “Stock Indices (as well as markets like metals, bonds & currencies) sold off in the early part of the week, primarily on anticipation of the first Federal Reserve rate hike since Dec 2018. Everyone knew it was coming. It has been anticipated for weeks (even months). So, the markets have been discounting this event for quite some time!
Even so, the markets felt the need to sell-off again – leading into this fundamental event. And, as is so often the case, the realization of that expectation triggered the polar opposite response – rallying stocks, metals & currencies in what could be the onset of new advances.
That dovetails with much of what has been anticipated in those markets, including action surrounding mid-March when intra-month trends often bottom (or peak) and head the other direction into month-end (see Tech Tip Reference Library descriptions of Intra-Month V and Intra-Month Inverted V Reversals).
Stock Indices are steadily reinforcing the significance of the Feb 23/24 lows – a low that was expected to be the ‘b’ or ‘2’ wave low (in most indexes) and usher in a more significant and substantial ‘c’ or ‘3’ wave advance. Even the NQ-100 reinforced that low by spiking below it but never generating a daily close below it.
On an intra-month basis, most indexes generated intra-month downtrends and then dropped to monthly support levels and held – fulfilling the primary downside price target linked to the intra-month downtrends. Those March 8 lows were/are expected to hold in the DJIA, DJTA, Russell 2000, S+P Midcap 400, S+P 500, etc. In contrast, the NQ-100 remained negative.
Those intra-month trends kept pressure on stocks and helped the weaker stocks and indexes spike to new lows at mid-month (fulfilling the primary downside timing target linked to the intra-month downtrends) even as the stronger stocks and indexes were building a base and preparing for a new surge once that ‘ceiling’ was lifted (after March 15).
On March 14/15, the indexes spiked a little lower to begin the week even as the leading DJTA provided another positive signal – closing back above its daily 21 High MAC on the same day (March 15) it turned the direction of that 21 High MAC up.
Due to the falling (inversely-correlated) 21 MARC, that 21 MAC reversal had an increasingly good chance of remaining intact and triggering a corresponding uptrend – which took hold with a vengeance today.
This came after the DJTA went through a textbook sequence of daily trend signals since its Feb 24 spike low. It initially rallied from that low and turned its daily trend up, leading to an initial high and reactive 2 – 3 day sell-off (into March 8).
During that pullback, the DJTA twice neutralized its daily uptrend but did not turn it down – the classic setup for a secondary low (‘b’ or ‘2’ wave low) and the onset of a higher-magnitude advance. It quickly re-entered its daily uptrend on March 9 and has been targeting higher levels ever since.
In direct contrast, the weakest index (NQ-100) dropped to new lows into March 15 (mid-month) – fulfilling its daily trend and intra-month trend signals while testing and holding monthly support, providing fulfillment to analysis for a divergent low. Those factors combined to pinpoint the ideal time and price for a low.
This NQ-100 spike low – to its lowest low since May ’21 – comes during the 2-year anniversary of the same week during which many stocks bottomed in March 2020. At that time (2-Year Cycle), several stocks and some indexes (DJTA, NQ-100) set their intraday lows or low daily closes on March 16 – 18, ‘20.
This reinforces the outlook for most stocks and indexes, which were/are expected to hold their Feb 23/24 & March 8 lows as part of a developing recovery that should ultimately produce the next intermediate high in the middle half of April (not too dissimilar from when stocks set initial peaks in 2016 – another phase of the 2-Year Cycle that has been in focus).
The DJIA (and other indexes) has a consistent 14 – 15 week low-low-low-high Cycle Progression – dating back to March ’21 – that portends a future peak on April 11 – 22. In the case of the DJTA, a 50% rebound in time (16 weeks down/8 weeks up) would also culminate (peak) on April 18 – 22, ’22.
That would also perpetuate a ~5.5-month (5.25 – 5.75 months or 22 – 24 weeks) high-high cycle that has timed 6 consecutive intermediate peaks in the Transports.
The next validation to these divergent lows would arrive if/when stock indexes generate daily closes above 34,179/DJIA, 4411/ESM, 14,389/NQM, 15,646/ DJTA, & 2067/QRM and turn the intra-month trends up.”
Stocks fulfilled the outlook for a decisive peak in early-Jan ’22 followed by a 2 – 3 month plunge to begin 2022. Daily & weekly cycles honed that and projected a multi-week (or longer) bottom on Feb 23/24. That is just the start of a massive topping process projected for 2022 – ultimately leading to market jolts in late-2022 through late-2023. The next phase – and next danger period – could follow a peak ‘in the middle half of April’ (ideally on April 19 – 21) and be followed by another sharp sell-off.
This stock market rebound is unfolding as Gold is fulfilling analysis for an accelerated advance into early-March – with a myriad of cycles peaking this past week, on March 7 – 11. This powerfully validates War Cycles projected to begin in late-2021/early-2022 and stretch through 2025 even as it could time a 1 – 2 month peak in Gold.
How Does This Impact 10, 20 & 40-Year Stock Cycles Colliding in 2022?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.