NQ-100 Validates March 13/14 Cycle Low; Reinforces Projected Rally to 13,800 – 14,000/NQ.

03/15/23 Weekly Re-Lay Alert: Nasdaq-100: Validating March 13/14 Cycle Low – “Stock Indices are maintaining the status quo with continued divergence in which the DJIA is one of the weakest (small and midcaps are also negative) while the NQ-100 remains in the most positive structure.  The Nasdaq-100 was the latest to (previously) bottom, setting its lowest daily close in late-Dec ’22 in line with a ~7-month/30-week Cycle Progression.

A cycle of that magnitude usually creates a low that holds for at least 2 – 3 months, if not longer.  Ideally, the subsequent rally would last [reserved for subscribers].

After setting that low, the NQ-100 rallied and ultimately turned its weekly trend up.  (Currently, the NQ-100 would not even neutralize its weekly uptrend until a weekly close below 11,520/NQM.)

At the same time, (late-Jan/early-Feb ’23), the NQ-100 closed above its weekly 21 High MAC as that average was turning higher… a bullish pair of signals on a 1 – 2 month basis.

Both that pattern and the weekly trend pattern usually usher in an initial peak and multi-week pullback – often retracing to the weekly trend point and/or the rising weekly 21 High MAC – before a new rally takes hold.

The NQ-100 pulled back to the rising weekly 21 High MAC and retraced 50% of its Jan/Feb rally – reinforcing range-trading support and other critical levels of support near 11,800 – 11,900/NQM.

It spiked lower into March 13 – perpetuating a ~1-month/~30-day** low (Oct 13/14 ’22) – high (Nov 13/14 ’22) – high (Dec 13/14 ’22) – high (Jan 13/14 ’23) – high (Feb 13/14 ’23) – low (Mar 13/14 ’23) Cycle Progression that corroborates an ~11-week low-low-(low) Cycle Progression this week.

(**The daily Cycle Progression is more pronounced in some other indexes, like the DJIA, but all of them have set these mid-month turning points.)

All of these factors favored a multi-week low taking hold at/near the March 13 low… which appears to be the case.  One other form of (bullish) divergence was also observed among the NQ-100 indexes…

While the June ’23 NQ-100 futures closed slightly below their early-month lows, the March NQ-100 futures AND the QQQ ETF did NOT close below their early-month lows on March 10 – leaving their intra-month trends in a positive structure.

Another corroborating factor is the intra-year trend.  To recap, a market needs to give a weekly close above the trading range of the first three weeks (of a new year) in order to turn its intra-year trend up.

Once that has been triggered, that high (breakout point, the high of the first three weeks) becomes a decisive level of ‘resistance turned into support’ that is often retested during a subsequent pullback… before a new impulse wave (advance) emerges.

The June NQ-100 futures rallied from an early-Jan low of 10,870/NQM to a high of 11,878/NQM in that Jan 3 – 20, ’23 time frame (3 wks)… setting the opening range.

On Jan 27, the NQ-100 closed above that range and turned its intra-year trend up.  It has remained in that intra-year uptrend ever since.  Since the early-Feb ’23 peak, the NQ-100 has been slowly retreating back toward that decisive breakout level (now support).

On March 13, the NQ-100 dipped below 11,878/NQM and then quickly reversed higher – reinforcing the decisive nature of this intra-year trend support and initially providing validation to its intra-year uptrend.

On a near-term basis, the NQ-100 could provide three forms of confirmation to a developing (March 13/14) low… before or by the end of this week.  The first of these is due to the fact it has already neutralized its daily downtrend twice while rallying from its March 13 low:

— Daily trend turns up; This would occur if the NQ-100 gives a daily close above 12,407/NQM.

— Daily close above 12,462/NQM would turn the intra-month trend up AND have the NQ-100 closing above its descending daily 21 High MAC… a pair of signals.

— Weekly close above 12,446/NQM would generate a weekly 2 Close Reversal higher.

Any of these factors would signal at least a 1 – 2 week low in the NQ-100.  Two or more of them would confirm greater strength and reinforce the potential for the NQ-100 – and other indexes – to rally into late-March ’23, when weekly cycles converge.

(A related ~2-month/~60-degree high-high-high-(high) Cycle Progression could even stretch a NQ-100 peak into April 3 or 4.)

As far as price objectives, the NQ-100 is still likely to rally to at least ~13,200 and potentially to 13,500 – 13,800 – the mid-Aug ‘22 high and corroborating upside targets.  Three consecutive monthly LHRs (extreme upside monthly targets) also converged in that range.

A high near there would double the Oct/Nov ’22 rally and the Jan ’23 rally – two examples of range-trading.  It would also fulfill a 50% rebound of the 2021/22 sell-off.

[On a cash basis, the NQ-100 continues to trace out range-trading quadrants, bordered by 16,500, 15,000, 13,500, 12,000 & 10,500/NQ.  The major top occurred with a high weekly close at 16,573/NQ and triggered an overall decline to 10,500/NQ.  Those ranges remain pivotal with ~12,000/NQ being the latest swing point.

That is one of several reasons why a rally to at least 13,500/NQ is still a strong potential – a move that would also fulfill a 50% rebound of the entire decline.]

Based on wave action, there is a good chance the futures could spike above those levels & attack ~14,000/NQM – where a new rally (from the March 13 low, if that holds) would equal the magnitude of the Jan ’23 rally.

That is near where its declining monthly 21 High MAC would be in April ‘23.  (Since its monthly 21 High MARC has jumped to ~14,500+ this month, the 21 MAC would continue to head down and potentially apply resistance to this advance… if it made it that high.)…

As for other indexes, the Russell 2000 & S+P Midcap 400 have followed their March 6 reversals (lower) by plummeting to new intra-year lows.  The weekly close will determine whether they turn the intra-year trends down (if they close below the early-Jan ’23 lows) or hold this pivotal support and rebound.

The DJTA, after triggering an outside-day/2 Close Reversal sell signal on March 6 (and then a subsequent one on March 9, creating a daily 2 Step Reversal lower), has also plunged toward its year-opening low but not yet penetrated it.  If a low is set this week, it would fulfill a ~12-week low-low-low-(low) Cycle Progression and a related ~24-week low-low-(low) Cycle Progression.

(Both of these are related to the ~47 – 48-week decline it suffered from Nov ’21 into Sept ’22… the latest phase of a fairly precise ~47-week high (Jan ’20) – high (Dec ’20) – high (Nov ’21) – low (Sept ’22) Cycle Progression that portends a future low in Aug ’23.  March 10 – 16 is the potentially-reinforcing midpoint of that cycle – when an intervening low is most likely.)

In all of the indexes, there is the potential for a mid-month low (the timing objective of their intra-month downtrends) and a rally into late-March/early-April ‘23.  The important distinction will be where those future highs take place when another critical divergence is very likely (new highs in NQ-100 and lower highs in many of these other indexes).”  FUTURES TRADING INVOLVES SUBSTANTIAL RISK!

Stock indexes remain on track for another rally with the NQ-100 and S+P 500 projecting higher levels (~13,800/NQ, likely above 14,000 & ~4300/ES) before their advances would have a better chance of peaking.

Those upside targets – and how/when they are reached – should reveal a great deal about what to expect leading into key cycles in late-July/early-Aug ’23.  In the interim, March 13/14 cycle lows should spur a new rally into late-month.

What Did/Does 4Q ’22 4-Shadow Signal Portend for 1Q ‘23?

How Long Will New Rallies Last?

What Would Likely Follow Tests of ~14,000+/NQ & ~4300/ES?

 

Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.