S+P 500 Turns Weekly Trend Down! Multi-Week Bounce Should Precede New Decline.
08/19/23 – “Stock indexes have sold off into the ~10-day period (Aug 18 – 28, ’23) when a low has been anticipated. Until that period is lapsed, there remains the risk of additional downside spikes. For now, most indexes have reached the downside objectives for a ‘normal’ correction. They now need to [reserved for subscribers]…
Stock Indices have sold off to initial downside targets, ushering in a decisive time. Intermediate cycles, weekly trend patterns, and even overall wave structure reinforce that conclusion.
For starters, the DJIA (and many other indexes) dropped right to its rising weekly 21 High MAC and closed the week above that ascending support…
Not only did it test & hold that 21 High MAC, it also dropped right to its early-May ’23 high – the likely ‘1’ wave peak of a potential 5-wave structure that began with the early-March ’23 low (34,257/DJIA) – while testing and holding its weekly HLS (extreme downside weekly target at 34,335/DJIA).
As previously discussed, it also dropped right to its Jan ’23 high – the opening range that dictates the parameters for the intra-year trend – and closed the week above that trend support. In doing so, it neutralized its weekly uptrend for the second time…
Other indexes & indicators concur. The Russell 2000 also twice neutralized its weekly uptrend while dropping precisely to 1 – 2 month support at ~1840/QRU. It did that while initially fulfilling a 21 – 22-week low-low cycle that has governed its action for ~2.5 years…
Another index also provided the potential for a 1 – 2 month low, but did so from a contrasting vantage-point that provides an important clue about what to expect over the next 2 – 4 weeks…
The S+P 500 turned its weekly trend down, another signal that often ushers in an initial multi-week low and subsequent reactive bounce. The big difference is that this index would be expected to rebound to a lower high… That could be showing (if no additional downside is seen in the coming week) that a Sept ’23 peak will be in close proximity to the July/Aug peaks.
Stock Indices have initially fulfilled many of the downside objectives for a ‘normal’ decline during this time frame. The first sign that a 1 – 2 week low is taking hold would be”
The S+P 500 has just reinforced ongoing analysis for multi-month peaks to take hold in late-July/early-Aug ’23 and usher in a 3Q ’23 ‘danger period’ that could/should spur sharp sell-offs. That is a lagging & confirming indicator that is usually triggered near the bottom of an initial sell-off and portends a reactive 1 – 3 week bounce (into the next cycle high on Sept 11 – 15, ’23??) followed by a more significant decline.
That validates that the Russell 2000 (& S+P Midcap 400) have been showing, leading this reversal after fulfilling multi-month upside targets AND cycles in late-July ’23 while maintaining its intra-year down/neutral trend status – setting the stage for a new multi-month decline.
It peaked right at is converging monthly 21 & 40 High MACs – the upper ranges for its 3 – 6 month and 6 – 12 month trading ranges – providing a myriad of ‘ideal’ criteria for a major ‘B’ wave rally to peak and a large scale ‘C’ wave to begin. It has reached 1 – 2 month support (~1825 – 1840/QRU) and should see a 1 – 3 week rebound into mid-Sept ’23… before a second, more significant ‘danger period’ begins.
Is the Russell 2000 the ‘Canary in the Coal Mine’… or an Outlier?
What is the significance of Monthly 21 & 40 High MACs being tested and holding?
Is this a ‘Major ‘B’ Wave Peak’ in at least one key index??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.