Stock Decline; Russell 2K Hits 1710 (6 – 12 Month) Target.
05/14/22 Weekly Re-Lay – “Stock indices have plunged after fulfilling projections for a divergent peak on April 19 – 21. That ushered in a new ~3-week decline with most indexes matching the duration of their three previous, successive declines. Reinforcing that, several indexes attacked downside range targets and monthly support levels at their lows – creating the ideal setup for a new 1 – 2 month bottom…
Stock Indices are in the time frame with the greatest (cyclical) chance for a second 1 – 2 month bottom, having completed the minimum overall decline for an intervening low between ~8-month cycle highs (in Jan & Sept ’22).
In doing so, stocks reinforced the overall equity outlook for 2022 that called for two primary peaks – in Jan & Sept/Oct ’22 – with a significant sell-off (at least 4 months, possibly 5 – 5.5 months) in between. The latest phase of that sell-off began for most indexes in late-March but didn’t accelerate until after the DJIA’s synergistic cycle high on April 19 – 21.
The DJIA precisely fulfilled that cycle peak and ushered in, for the 4th time since Nov ’21, a ~3-week decline lasting 15 – 16 trading days and leading to a subsequent low on May 12. That matched the duration of the Nov ’21, Jan ’22 & Feb ‘22 sell-offs while also fulfilling the intra-month downtrends.
All three primary indexes reached their monthly support, the price targets for their intra-month downtrends, as the NQ-100 fulfilled a 7 – 8 week low-low-low-low Cycle Progression and is poised to potentially mimic its most recent rally (mid-March into late-March) – a ~2-week/14 – 15 day rebound.
If the Nasdaq 100 does something similar in May, it would rally into late-May – the time when a ~6-month/~27-week low-high-(high) Cycle Progression has already been projecting a rebound peak. Reinforcing the potential for intermediate lows at this time, multiple indexes attacked key downside price (range) targets and related support.
A perfect example is the Russell 2000, which just reached 1710/QRM on May 12 – fulfilling its latest range-trading target while completing a 50% retracement of the entire 2020/2021 advance. The April 27 WR Alert & May ’22 INSIIDE Track highlighted that downside target, which also had the latest decline equaling the prior (Jan/Feb ’22) decline – a textbook ‘c = a’ wave scenario.
At the same time, the DJTA attacked 6 – 12 month support near 14,000 while the DJIA & S+P 500 also reached their ‘c’ wave downside targets.”
Stocks remain in a major topping process, fulfilling the outlook for a decisive peak in early-Jan ’22 followed by a multi-month plunge to begin 2022. That is just the start of a massive shift projected for 2022 – ultimately leading to market jolts in late-2022 through late-2023. An overall 4 – 5 month decline was/is expected between that Jan ’22 cycle peak and the next (Sept/Oct ’22) cycle peak.
The Russell 2000 has just attacked its 6 – 12 month & 3 – 6 month downside target near 1710/QR – a critical objective that has been discussed since it reached its major, upside (5th wave) objective at 2460/QR in Nov ’21. Now that it has fulfilled that analysis, the Russell could begin to lead a bottoming process in equities. On an intermediate basis, the next peak is expected in late-May ’22.
What Does Russell 2K Action Portend for Other Indexes?
Will Another Sell-off Follow Late-May ’22 Cycle Peak??
How Does This Impact 10, 20 & 40-Year Stock Cycles Colliding in 2022?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.