Stock Indexes Fulfilling Projected 1Q ’26 Plunges; Additional Downside Expected.
03-18-26 – The Rule of Alternation: Stock Market Declines II – “Over the past two decades, stock indexes have suffered repeated multi-month declines that mostly adhered to a version of Elliott’s ‘Rule of Alternation’ – in which successive ‘corrections’ do not usually follow the same corrective pattern.
Most recently, the early-2020 & early-2024 declines were quick, sharp plunges that were brief.
Surrounding those were the 2018 & ‘22 corrections that consumed a majority of each year.
If the 2026 decline is to perpetuate this ‘alternation’, it should be more like the 2022 sell-off – consuming a majority of the year but not suffering as steep of an individual plunge as occurred in 2020 & 2024.
There are many other factors that went into recent sell signals (Feb 11/12th & Feb 25th) and projected significant declines into ~mid-March ’26 and potentially into early-April ’26…
Stock Indices are fulfilling the outlook for another large sell-off after peaking in lockstep with 2-Year & 4-Year Cycle Progressions that had projected – since the April ’25 low – an overall rally into a Jan/Feb ’26 peak, followed by a new sharp decline.
The NQ-100 led the related topping process, fulfilling a myriad of timing indicators and Cycle Progressions that pinpointed late-Oct ’25 as the time for a 3 – 6 month (or longer) peak in that index.
At the time, it fulfilled an ~8-month/33 – 36-week low (Mar ’23) – low (Oct ‘23) – high (July ‘24) – high (Feb ‘25) – (high; Oct 20 – 31, ’25) Cycle Progression that helped hone the time for a precise peak.
On a multi-year basis, that Oct ’25 peak completed the 5th consecutive ~3-year advance (since March ‘09 low) – fulfilling an intriguing series of bull market (wave timing) symmetry with successive rallies in:
- March 2009 – March 2012
- June 2012 – July 2015
- August 2015 – August 2018
- Dec 2018 – Nov 2021
- October 2022 – October 2025
On the basis of the ~8-month Cycle Progression, the ideal scenario – IF a 6 – 12-month peak was/is forming – is for that high to be followed by a 22 – 24-week decline (.618 – .667 of the cycle) – potentially stretching a 1 – 2 month bottom into April ’26.
In either case (~22-week decline, which is a .618 time retracement and sets the stage for a contrasting .618 rebound into the next phase of that ~36-week cycle… or a ~24-week decline that sets it up for [reserved for subscribers] that CP focuses on mid-July ’26 as a future, very pivotal time frame.
Since its Feb 11/12th sell signal, the DJIA has been the weakest index and fallen the sharpest, reinforcing its potential to stretch this decline into early-April ’26.
It has set multi-month lows every 25 – 26 weeks since Oct ’23 and has an overlapping 52-week low-low-(low; April 3 – 10, ’26) Cycle Progression that both recur in April ’26. That is when a larger-magnitude low could take hold. The DJIA maintains a 1 – 2 month downside target near 45,000/DJIA.
There are two primary price indicators that need to validate these timing indicators and confirm that (at least) 3 – 6-month peaks are forming. They are the weekly trend and the weekly 21 MAC.
For the past few months, the NQ-100 has been tracing out a bearish 21 MAC reversal sequence and was more recently joined by the DJIA & S+P 500. In the past two weeks, all three have given bearish signals (bearish confirmation, since this is a lagging & confirming indicator).
They need the weekly trends to corroborate those signals. The DJIA, S+P 500 & NQ-100 have all neutralized their weekly uptrends multiple times – setting the stage for a reversal signal. It would take weekly closes below 46,494/DJIA, 6631/ESM & 24,388/NQM to turn those weekly trends down.
Considering that March 20th is the earliest that could occur, and that a weekly trend reversal often occurs at the end of an initial decline (a lagging & confirming indicator), it reinforces the significance of the ~2-week sequence that first took hold in the NQ-100 but quickly expanded to others.
It was described in January & February ’26 and – after setting a peak on Jan 9/12, ’26 – was projected to [reserved for subscribers]…
1 – 4 week traders could be holding short positions in e-mini S+P futures from 7026 – 7035/ESM, with avg open gains of about $17,600/contract. Move risk/exit stops on remaining positions to [reserved for subscribers]…
1/3 of these short positions should have been exited when 6671/ESM was hit on March 9th, w/avg gains of about $18,000/contract. Another 1/3 can be exited if/when xxxx/ESM is hit (and then adjust remaining trailing stops accordingly).” TRADING INVOLVES SUBSTANTIAL RISK!
Stock Indexes are validating multi-month cycle highs (and sell signals) on Feb 11 – 13th. The S+P 500 led the latest reversal and generated an additional sell signal on Feb 25th, projecting an initial sharp decline into March 9 – 13, ’26 … as part of the overall outlook for February – July ’26. (Watch mid-2026 for related Analysis.)
The next (expected) stage is for another sharp drop into late-March/early-April ’26… before a larger rebound – with the S+P targeted to reach 6419/ESM as the NQ-100 remains on target for a multi-month drop to ~23,200/NQ. The DJTA is the one outlier that could be giving clues surrounding a future cycle high.
The outlook for a powerful surge in energy prices (and GSCI) in 1Q ’26 coincides with that as inflation markets continue to portend trouble in 2026, potentially stretching into 2027. That was reinforced by mid-Jan buy signals & subsequent action in Crude & the products. Unleaded Gas projects an overall advance into the week of March 30 – April 2, ’26.
What Would Late-March/Early-April Stock Cycle Lows Reveal About 2026?
How are Bullish Oil/Energy Cycles Reinforcing Outlook for Jan ’26 – April ’27?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.