DJTA Reaches Major Upside Targets! Stock Market Peaking; Watch 16,700/NQ.
11/06/21 Weekly Re-Lay – “Stock Indices have surged to new highs, reinforcing the early-Oct. lows and the bullish signals that have followed. The DJTA, which fulfilled multiple cycle lows on Sept. 20, led this turnaround (even as the S+P 500 and NQ-100 waited until early-Oct. to complete intermediate corrections) and skyrocketed this past week on the back of Avis.
The magnitude of the DJTA’s advance – from Sept 20 into Nov. 2 – matched the magnitude of its initial March – June ’20 rally, a potential case of wave ‘5’ = wave ‘1’. In that case, the typically-dynamic and extended wave ‘3’ lasted from June ’20 into May ’21. So, once again, the DJTA has the potential to set a multi-week or multi-month peak before others.
That surge powerfully validates the bullish weekly trend reversal the DJTA generated in Oct., when it showed that its ~4-month correction was complete and – along with the S+P 500, Russell 2000, and some other indexes – projected rallies to new highs.
It also corroborated the Russell 2K action, which had consolidated in a ‘flat correction’ (see INSIIDE Track) since peaking in March ’21. A flat correction reveals pent-up buying (that prevents it from selling off during each down cycle) and usually spurs a sharp rally immediately after that sideways pattern…
Another reason for expecting that is the wave structure in the NQ-100, which also signaled in Oct. that it had entered a multi-week (impulse) wave ‘5’ instead of the (wrong) previously-suspected ‘b’ wave bounce. That also projected a rally to new highs…
Stocks showed additional strength, heightening the focus on 1Q ’22 for the next multi-month peak. In the interim, an initial peak is likely on Nov. 4 – 9 – perpetuating a ~60-day/~2-month low-high-high-high-(high) Cycle Progression in which a low and then a series of peaks were seen on the 4th – 7th trading day of every other month (March, May, July, Sept. and Nov ‘21?)…
This comes after both Bonds & Notes signaled they were completing ‘5th wave’ declines (at those lows) and were poised for a larger rally. At the Oct. lows, Notes reached multiple downside objectives, fulfilling key wave targets, while Bonds prevented their weekly trend from turning down – a sign of strength that projected/projects a rally back above its July ’21 high of 165-15/USZ.
That is similar to what the S+P 500, Russell 2000, and other stock indexes did in late-Sept/early-Oct. – resulting in the culmination of their corrections.”
Stocks are fulfilling critical upside targets at the same time Bonds and Notes are signaling a multi-month bottom (the two often trade inversely). Most indexes are expected to peak on Nov 4 – 9 and then see a sharp, multi-week sell-off.
The Russell 2000 is fulfilling its monthly & weekly trend patterns as well as Elliott Wave structure – all of which projected a final surge following the Sept 20 cycle low. Some follow-through could be seen – with key upside targets a little higher than current levels – before an initial sell-off into late-Nov.
The DJTA has done the same – and has reached multiple major upside price targets – setting the stage for a multi-month (or longer) peak. The NQ-100 is expected to spike up to ~16,700/NQ in order to fulfill a decisive wave ‘5’ objective. Continued divergence is expected as the equity markets prepare for what could be a dramatic shift in 2022.
How far could stocks drop into late-Nov/early-Dec ’21? What are ramifications of DJTA, Russell 2000 and NQ-100 attacking multi-month or multi-year upside targets??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.