Stock Indexes Magnifying ‘Eerie Parallels’; NQ-100 Fulfils Oct 28/29th Cycle Peak.
11-05-25 – “Throughout 2025 (even in late-2024), INSIIDE Track & the Weekly Re-Lay have been addressing a perceived similarity between the 1920’s, the 1990’s & the 2020’s – dealing with derivatives that took on a life of their own and ultimately became the proverbial ‘tail wagging the dog’.
In the 1920’s, it was the forerunner to the modern-day ETF – with shell companies purchasing shares of overly-expensive stocks (often on margin and always at already-elevated prices) and then issuing shares so that ‘Joe Public’ could afford to ‘play the market’.
In the 1990’s, it was ‘dot-com’ companies – often created out of thin air and with no real product (or anything tangible, not even in the digital world) but allowing ‘Joe Public’ to speculate like the big boys and risk their entire retirement on empty promises.
In the 2020’s, it has been cryptocurrency, and derivatives of cryptocurrency, and then NFTs and memes and whatever else allows Joe Public to speculate with reckless abandon on the promises that a digital trading card is the key to eternal riches.
In each case, those derivative markets take on an oversized impact and importance due to a perilous combination of factors, including:
- Leverage
- Point of entry
- Liquidity
When things are going well, none of those three factors matter. The leverage allows for increased gains, the (relatively high) point of entry is a non-factor if a market is trading higher, and the liquidity is suitable for handling orders in a bull market.
The problem occurs when things turn negative…
- Leverage works in both directions.
- Point of entry is suddenly a major factor (if you entered NVDA at 160 or Bitcoin at 80,000, you would have a much different perspective than having entered at 40 & 40,000 – two years ago).
- Liquidity tends to dry up – or at least drop significantly – when everyone only wants to sell.
And now, just as 100 years ago, there are multiple levels of derivation – including one that could act in the same exponential manner on the way down: major corporations suddenly devoting chunks of their working capital into the same speculation.
If the derivatives head lower, their stocks could be at risk EVEN IF their core business is still doing fine. Is this a valid concern?
If ongoing analysis – for Bitcoin to peak in 2025 (initially in July ’25 and then finally in 4Q ’25) and suffer a serious downturn in late-2025… and another plunge in 2026 – is even close to being accurate, it could be a big problem.
This is another instance where the 90/10 Rule of Cycles is likely to apply… and for good reason.
Most investors will not recognize the risk – or connect the unmistakable dots – until it has become obvious to everyone… and then panic mentality sets in.
What is expected in the interim?
Stock Indices are in daily downtrends except, ironically, the DJTA. Most of those indexes bounced today – rallying right to their daily LHR levels without neutralizing their new daily downtrends. That ushers in the potential for another downturn – on Nov 6th or 7th – and the increased potential for an accelerated decline to follow.
It would take daily closes below their Nov 4th lows to confirm that and signal new weakness. That would turn the new intra-month trends down and – in most cases – also have stock indexes close below their flattening daily 21 Low MACs.” TRADING INVOLVES SUBSTANTIAL RISK!
Stock Indexes remain in overall uptrends, expected to extend into Dec ’25 in most indexes – when a consistent ~13-month Cycle Progression next recurs. A more significant peak is expected at that time, dovetailing with the latest phases of the ~2-Year Cycle and a related ~4-Year Cycle Progression.
The NQ-100 had daily & weekly Cycle Progressions most synergistic on Oct 28/29th – when a multi-week peak was likely. On Nov 4th, it turned its daily trend down – confirming a multi-week (and potentially larger) peak. Future price action should clarify how significant of a decline is likely in the coming months.
The Sept 3, 2025 Weekly Re-Lay Alert reiterated the outlook for the rest of 2025 and expectations for a dangerous period between Dec ’25 and March/April ’26. It stated:
9-03-25 – “…there is the pair of pivotal cycles in the second half of 2025 – both of which were/are likely to time the culmination of significant rallies and usher in critical tops. The first of those was in late-July/early-August…
The second cycle peak arrives in Dec ’25 and has been cited in previous analysis regarding these two time periods. Among other things, it is the next phase of a ~13-month low (Sept ’22) – low (Oct ’23) – high (Nov ’24) – (high; Dec ’25) Cycle Progression.
Perhaps more significant is its connection to the ~2-Year Cycle and the over-arching ~4-Year Cycle.
The ~2-Year Cycle was examined frequently in late-2021/early-2022 – when a 6 – 12-month peak was forecast for Jan 2022. At the time, it was fulfilling a ~2-Year low (Jan/Feb ’14) – low (Jan/Feb ’16) – high (Jan ’18) – high (Jan ’20) – (high; Jan 2022) Cycle Progression and projected to spur a 6 – 9 month drop.
Two phases later is ~January 2026 and closely dovetails with that Dec ’25 (~13-month) cycle peak.
That is also the next phase of the over-arching ~4-Year low (Jan ’14) – high (Jan ’18) – high (Jan ’22) – (high; January 2026) Cycle Progression…It would be a more ‘pure’ cycle peak if new highs were seen at that time…” – End of excerpt from Sept 3, 2025 Weekly Re-Lay Alert
Will Stocks Ultimately Peak in Dec 2025?
What Did Early-’25 Plunge ‘4-Shadow’ for 2026?
Why is Dec ’25 – March/April ’26 Vulnerable?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.