Stock Indexes Exit ‘Largest Rally of 2022’; Weekly Trends Turn Negative.
08/31/22 Weekly Re-Lay Alert – “Stock indices have sold off after surging from July 14 into Aug 16, fulfilling the 1 – 4 week and 1 – 2 month buy signals triggered on the July 14 sell-off, perpetuating a ~1-month low-low-low-low-(high) Cycle Progression and fulfilling the outlook for ‘the largest rally of 2022’.
Some of the indexes, like the DJIA, reached 2 – 3 month upside targets (34,200/DJIA) that could mark its 3Q ’22 peak while others could still see additional spike highs in mid-Sept ’22. A related index, the DJTA, fulfilled a 20-week high-high-(high) Cycle Progression (Aug 15 – 19 high) while completing successive advances of exact duration (33 days each) – also signaling the potential for a multi-month peak.
The S+P Midcap 400 peaked within days of a ~21-week low-high-low-high-high-high-(high) Cycle Sequence while fulfilling an over-arching 41 – 43-week low-low-low-high-(high) Cycle Progression – and completing a full .618 rebound of their Nov ’21 – June ’22 decline… without turning its weekly trend up.
Ideally, they will all set intervening lows this week – after completing Intra-month Inverted V Reversals lower and fulfilling an 11 – 12 week high-high-low-(low) Cycle Progression. That should lead to a rally into, and divergent peaks during, mid-Sept.”
Stock indexes completed the July 14 buy signals – fulfilling projected 3 – 4 week advances into Aug 15/16 and up to primary upside objectives while completing what was forecast to be ‘the largest rally of 2022’. If a subsequent, divergent high is set on Sept 12 – 16, it would usher in a bearish phase for stocks in the second half of September ’22. Volatile consolidation is likely until mid-Sept.
The DJIA reached its multi-month upside target (~34,200), signaling a likely multi-month peak, as the DJTA & S+P Midcap 400 fulfilled decisive cycle highs that should create multi-month peaks. Most indexes failed to turn their weekly trends up, signaling multi-month tops and projecting declines back to their mid-June lows in the ensuing month(s). A few stocks could set higher highs on Sept 12 – 16 while most are likely to set lower highs and then enter a new bearish phase.
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. They then fulfilled projections for the largest rally of 2022, triggering 2 – 4 week buy signals on July 14 and fulfilling those signals on Aug 16. Consolidation is expected until Sept 12 – 16 ’22, when cycles again turn negative.
How Does Mid-Aug ’22 Cycle Peak Fit with Overall 2022/2023 Outlook?
Why Does DJIA, DJTA, Russell 2000 & S+P Midcap 400 Action Portend New Decline??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.