‘Largest Rallies of 2022’ Projected; Stock Market July 14 Buy Signals Unfolding.
07/20/22 Weekly Re-Lay Alert – “Stock Indices are steadily confirming expectations for a multi-month bottom in mid-June (June 13 – 21 was ideal cyclic time for a low – 2/3 of way between ~8-month cycle peak in early-Jan ’22 and next phase of ~8-month cycle in Sept ‘22) after several indexes spiked to 6 – 12 month downside targets at that time and fulfilled almost all of the downside potential – in price and time – for the first 7 – 9 months of 2022.
From there, stock indices were/are expected to experience their largest rallies of 2022.
In mid-June ‘22, the NQ-100 fulfilled weekly Cycle Progressions and Sequences while completing successive 11-week declines. (The Nasdaq-100 also fulfilled a corresponding daily Cycle Progression at its June 16 low and again at its July 13/14 secondary low… projecting future focus to Aug. 9 – 11.)
That mid-June low could/should be the start of a multi-month rally into monthly cycle highs in Sept/Oct ’22 – when a critical peak is likely. The weekly trends will be the primary filter for that outlook…
The June 30 ’22 monthly closes provided a powerful corroborating signal with the monthly trends – signaling that a multi-month bottom was taking hold and a 1 – 3 month reactive rally was imminent. As stated in the July ’22 INSIIDE Track:
6-30-22 – “Stock Indices continue to fulfill the outlook for 2022 and declined to pivotal 6 – 12 month downside targets/support while fulfilling the most likely cycle scenario between two peaks…
It reinforces that multi-year highs are likely intact in many stocks & indexes. If a 3Q ‘22 rally unfolds, as is still anticipated, it would be expected to lead to lower highs in the majority of those stocks & indexes. There are certain sectors that could diverge and set higher highs – when monthly cycles peak in Sept/Oct ‘22 – but that is expected to be the exception, not the rule.
This monthly trend action also adds further credibility to the potential for 2022/2023 to strongly resemble 1973/1974. Inflation, oil shocks, Roe v Wade, grain price surges & military conflict have already validated that parallel and projection.
Stock action has already initially fulfilled it but it would take a lot more to completely fulfill it. Here are some additional parallels… In 1973, the DJIA peaked in early-Jan and sold off for ~7 months before rebounding into a lower high in Oct ‘73.
In 2022, the DJIA peaked in early-Jan and sold off for ~6 months and is expected to ultimately rebound into a lower high in Sept/Oct ‘22.
In 1973, the Oct ‘73 secondary high led to another sell-off into year-end, a bounce into Mar ‘74 and then a decline into Oct ‘74 (and retest in Dec ‘74).
In 2022/2023, there are a myriad of corroborating cycles and factors that could trigger something similar to what was seen in 1973/1974.
On an intermediate basis, the DJIA just attacked its most important level of resistance turned into support – the level of the Feb ’20 and Aug ’20 peaks at 29,200 – 29,600/DJIA – as the S+P 500 neared similar support at 3560 – 3610/SPX (2022 HLS, 2022 plunge = Feb/Mar ’20 plunge, Aug ’20 high).
The NQ-100 reached a myriad of downside targets and support at 10,700 – 11,100 (2022 HLS, multi-year range-trading support, 50% retracement of Dec ’18 – Nov ’21 advance, test of the Sept/Oct ’20 lows – a type of 4th wave of lesser degree). That was/is the most likely range for a multi-month bottom.
From a timing perspective, stocks extended this decline into ideal time based on the ~8-Month Cycle (that timed the early-Jan ’22 peak). If a trend is turning, a market will often decline for 2/3 of the cycle (~5.5 months; June 13 – 21 low?) – leaving time for the ensuing rebound – into the final phase of the 8-Month Cycle – to be 50% of the decline (~23 weeks down/~11.5 weeks up).
The Nasdaq-100 corroborated that, fulfilling a 14 – 15 week high-low-low-(low) Cycle Progression and a related 28 – 29-week low-low-high-(low) Cycle Sequence in mid-June. It also completed successive 11-week declines – the ‘3’ and ‘5’ waves of what is likely a larger-magnitude ‘A-B-C’ decline (Nov ’21 – June ’22 = ‘A’ wave).”
Stock Indexes are fulfilling the outlook for a multi-month bottom on June 13 – 21 followed by a strong 1 – 3 month reactive rally into Sept/Oct ‘22.
During the first week of July, they corroborated this and set the stage for a secondary low around mid-July. They were projected to enter a bullish 1 – 2 week period after July 13/14 (see 7/09/22 Weekly Re-Lay), in line with daily 21 MARC and 21 MAC setups and action as well as the prevailing intra-month trends.
A corroborating ~18 trading-day high (3/03) – high (3/28) – low (4/26) – low (5/20) – low (6/16) – low (July 13/14) concurred, most notable in the NQ-100, and helped trigger a pair of Weekly Re-Lay buy signals for the July 14 dip (see 7/13/22 Weekly Re-Lay Alert).
That was forecast to spur a larger advance in the second half of July… that could/should easily morph into the largest advance of 2022.
In order to fulfill that, the DJIA would need to exceed ~32,800, the S+P exceed 4180/ESU and the Nasdaq 100 exceed 13,250 – 13,400/NQU (cash/futures). The interesting thing about all three is that they closely coincide with the early-June highs (DJIA & S+P 500) and early-May high (NQ-100).
To start the current week, stock indexes re-entered their intra-month uptrends and confirmed the latest phase of this developing advance.
Initially, this recent action is expected to spur a new rally above the early-June highs…
1 – 4 week & 1 – 2 month traders could have entered long positions in stock indexes during the opening hours of trading on July 14 as the indexes retested their early-July lows. Futures traders could have entered related futures with the same approach (entering longs down to the July 1/5 lows, including 3745/ESU & 11,381/NQU).
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Stock indexes entered a bullish period on July 14 in lockstep with daily & intra-month trends, daily cycles and daily 21 MAC/MARC indicators. A spike low and reversal higher took place, coinciding with the first pair of buy signals in 2022. This intensifies focus on Sept ’22 and what could be the most decisive time of this year. However, there are two other pivotal cycles before then!
On a broader basis, stocks powerfully fulfilled projections for a decisive peak in early-Jan ’22 followed by a multi-month plunge in the first half of 2022. An overall 4 – 5 month decline was/is expected between that Jan ’22 cycle peak and the next (Sept/Oct ’22) cycle peak… ideally bottoming on June 13 – 21! That is when stocks bottomed and produced their first reversal signal. July 14 produced the next.
How Do the July 14 Buy Signals Corroborate 3Q ’22 Outlook?
Why is Sept ’22 Such a Decisive Period in the 2022/2023 Outlook??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.