Nasdaq 100 Reinforces Projected Peak (~16,700/NQ); Early-Jan ’22 = Divergent Peak.
11/30/21 INSIIDE Track Update – “Stock indexes, after breaking below their Nov 18/19 lows and confirming larger-magnitude corrections, extended their declines in recent days. In several of these indexes, it is showing that the future (expected) cycle peak in 1Q ’22 could time a divergent peak with the S+P 500 and NQ-100 capable of setting higher highs while some of the other indexes set equal or lower peaks.
Recent action is also steadily validating the outlook for key indexes – like the Russell 2000 – to set wave ‘5’ peaks in Nov ’21 and then enter their largest declines in many months and potentially in the past 12 – 18 months. (It is in the process of triggering a 4-Shadow Signal by creating its largest decline in over 18 months.) That was described in the Nov ’21 INSIIDE Track before the Russell 2000 rallied to new intra-year highs and to major price objectives near 2460/QR:
10-29-21 INSIIDE Track – “The Russell 2000 peaked in March ‘21 and has been in a sideways correction since then… During each sell-off, the Russell 2K has been unable to turn its weekly trend down – indicating that new highs (above the Mar ’21 peak) are likely to be seen before a more substantial sell-off becomes possible. That (potential) new high would also be confirmation of a wave ‘5’ rally…”
The Russell 2K fulfilled that upside target during intermediate cycle highs on Nov 4 – 9 – fulfilling a ~2-month/~60-degree high – high cycle while peaking right at its multi-year upside trading range target. That trading range was set by the early-2020 peak near 1710 and the ensuing March ’20 low near 960 (1710 high – 960 low – 1710 – 2460/QR peak) and projected a surge to 2460/QR after the Russell 2000 broke above 1710 in Nov ’20.
By spiking to new intra-year highs (fulfilling its weekly trend and monthly trend patterns) AND fulfilling its Elliott Wave objective AND attaining this multi-year upside target, the Russell 2000 ushered in the time for a ‘more substantial sell-off’ in Nov ’21… and potentially longer.
That 2460/QR objective had been reinforced by the Mar ’21 low (~2085/QR) – precisely at the midpoint of that overall projected trading range (1710 – 2460), which supported declines in May, July & Aug ’21. For the majority of 2021, that support (2085/QR) held multiple pullbacks while creating a corresponding trading range target at the same 2460/QR level (1710 – 2085 – 2460/QR).
2085/QR is now the ‘4th wave of lesser degree’ support (the low before this culminating rally) – heightening its significance. That identifies it as pivotal support for this correction AND the breakdown point if an even larger-magnitude sell-off is in the cards.
At the same time the Russell 2000 was fulfilling that synergy of upside targets, the NQ-100 peaked right at its multi-month upside target (~16,700/NQ) and reversed lower – with key support near 15,700/NQZ. It turned its daily trend down and then entered a textbook 2 – 3 day reactive bounce where it now finds itself. That identifies the next 1 – 2 days as being pivotal for the short-term trend.
From a cyclic perspective, the peaks set on Nov. 4 – 9 fulfilled ~60-day/~2-month low-high-high-high-(high) Cycle Progressions in many indexes that had projected multi-week highs at that time – the penultimate high preceding a more significant peak expected in Jan ’22. At the same time, it reinforced the corresponding implications of those highs – from a ~2-month, ~4-month, ~8-month & ~16-month cycle basis.
Those early-Nov highs corroborated the early-Sept ’21 peaks, which had perpetuated a ~4-month high-high-high Cycle Progression (next recurring in Jan ’22) while reinforcing the prevailing ~8-Month (also recurring in Jan/Feb ’22) & ~16-Month cycles.
The Nov 4 – 9 peaks perpetuated the intervening/reinforcing ~60-day/~2-month low-high-high-high-(high) Cycle Progression that has its next phase in early-Jan ’22. The longer the early-Nov ’21 highs hold, the more convincing and more significant they – and the impending cycles become.
The DJIA provides a contrasting ~3-month/~90-degree cycle that could stretch an intermediate low into Dec. 17 – 24. Since March 20/23, ’20, the DJIA has set a multi-week or multi-month low every 3 months – with the latest three coming on March 23, June 18 & Sept 20/21, ’21. If that pattern repeats, a low could be seen (at least in that index) on Dec. 17 – 24. That would leave enough time for stronger indexes to subsequently rally into Jan ’22 and set higher highs.”
Stocks have fulfilled major upside targets with the NQ-100 recently joining the Russell 2000 and DJTA (which hit major upside targets in early-Nov) by spiking up to 16,700/NQZ – ‘where a myriad of upside objectives converge’ and setting a decisive peak. That ushers in a multi-month corrective period!
In early-Nov, the Russell 2000 fulfilled its monthly & weekly trend patterns as well as Elliott Wave structure – all of which projected a final surge following the Sept 20 cycle low. It reached pivotal upside targets near 2460/QR, projecting a subsequent (larger-magnitude) sell-off toward 2085/QR and ultimately below that.
The DJTA was similar – reaching multiple major upside price targets in early-Nov and setting the stage for a multi-month (or longer) peak. Continued divergence is expected as the equity markets prepare for what could be a dramatic shift in 2022, beginning with a decisive and divergent peak in early-Jan ‘22.
What are ramifications of DJTA, Russell 2000 and NQ-100 attacking multi-month or multi-year upside targets? What does this mean for sell-off after early-Jan ’22 cycle high??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.