Stock Market 2-Year Cycle; 1 – 2 Week Low Could Trigger Bounce into early-Feb.
01/26/22 Weekly Re-Lay Alert: 2-Month, 4-Month, 8-Month & 2-Year Cycles Validated – “Stock Indices are powerfully fulfilling what the 2-month, 4-month, 8-month & 2-Year Cycles have been projecting since early-May, early-Sept & early-Nov ’21 – when successive highs were set and projected focus to early-Jan ’22 for a more significant peak and reversal lower. The Nov/Dec ’21 sell-off corroborated that by triggering 4-Shadow Signals in most indexes.
They have dropped sharply since fulfilling the outlook for a divergent peak in early-Jan ’22 and the entry into a dangerous period – in line with many similar Januarys on a 2-year interval.
Many stocks and indexes had already signaled 3 – 6 month (or longer) peaks in Nov ’21 after fulfilling multi-year upside price targets and wave objectives (as well as decisive range-trading targets) and had already experienced their ‘a’ wave declines (Nov/Dec ’21) and ‘b’ wave rebounds (into late-Dec ’21).
That set up early-Jan ’22 as the time to begin a sharper sell-off – the more dynamic and/or devastating ‘c’ wave decline, which has since unfolded.
The DJTA was the most precise, topping in sync with a very precise ~2-month/~60-day high-high-high-(high) Cycle Progression – previously timing highs on the second trading day of the month in July, Sept. & Nov. ’21… and doing the same on Jan 3/4, ’22. It has sold off since then… along with most other indexes.
On Jan 21, key indexes added a decisive level of corroboration to this ongoing outlook. The S+P 500 and Nasdaq 100 indexes reversed their weekly trends to down. [The DJIA has twice neutralized its weekly uptrend and needs a weekly close below 34,229/DJIA to reverse that weekly trend to down.]
That is a lagging/confirming indicator that often times (within a week or so) an initial low and the onset of a reactive 1 – 3 week bounce. It also signals that a higher magnitude decline is unfolding and another sell-off should follow that reactive rebound. There are other factors that reinforce the potential for an initial low before the end of January…
On a short-term basis, the NQ-100 was expected to stretch its decline into Jan 25 – 27, when related daily cycles bottom. That is still the case.
Then there is the 2-Year Cycle that has been discussed since mid-2021 and which has spurred January sell-offs (a majority being 10 – 15% declines) in 5 of the past 6 phases…
In 2010, stocks began the year with an early-Jan ’10 spike high and then a quick, sharp sell-off into the opening days of Feb. ’10. The Nasdaq-100 led the way and suffered a 10+% drop before bottoming.
In 2014, stocks began the year with an early-Jan ’14 spike high and then a quick, sharp sell-off into the opening days of Feb. ’14. The DJIA led the way and suffered an ~8% drop before bottoming.
In 2016, stocks began the year with an immediate sell-off after peaking in the final days of Dec ’15. They suffered a pair of sharp sell-offs into the opening days of Feb. ’16, losing ~15%. Much like in 2021/2022, many stocks had peaked in 2015 – in May – July ’15 – and then experienced initial sell-offs into late-Aug & late-Sept ’15… just as they did in 2021.
Stocks then rebounded into early-Nov ’15 – when most set a secondary high (just like in 2021) – and were jolted by a pair of sell-offs into mid-Nov & mid-Dec ’15 (very similar to 2021). They rebounded into late-Dec ’15 – just as in 2021 – and then began another sharp sell-off during the first three weeks of January ’16.
Déjà vu?
In 2018, stocks began the year with a mid-Jan ’18 spike high and then a quick, sharp sell-off into the opening days of Feb. ’18 – again losing over 10%.
In 2020, stocks began the year with a mid-Jan ’18 spike high and then a quick sell-off into the final days of Jan. ’20, in preparation for a larger plunge 6 weeks later.
In 2022, stocks were forecast to peak in early-Jan. ’22 – perpetuating corroborating 2-month, 4-month & 8-month cycles – and then see a similar sell-off in Jan. ’22.
Most indexes have now created the largest declines since Feb/Mar ’20 – a 4-Shadow Signal on the next higher magnitude that could be warning of a larger correction after the next rally. More on that later.
For now, the trends remain solidly down even as the Nasdaq-100 – the index that has led a large chunk of the January selling – has entered the time (Jan 25 – 27) when a short-term low is more likely. That dovetails with the weekly trend patterns and has dragged the other indexes lower as well. That could spur a final spike low before some consolidation takes hold.”
Stocks are adhering to the outlook for a decisive peak in early-Jan ’22 followed by a new multi-month plunge to follow. That has been expected to trigger the more dynamic (and usually more devastating) ‘C’ wave declines in Jan/Feb ’22 with an intervening (lower) high expected in early-Feb. “A more vulnerable period unfolds after that.”… and was just reinforced by a higher-magnitude 4-Shadow Signal that portends another sharp plunge after a bounce into early-Feb.
That is set to unfold at the same time Gold has been forecast to see an accelerated advance into Feb 21 – 25 – hinting at more trouble on the horizon during the month of Feb ‘22.
This action is initially corroborating the outlook for a dramatic shift in 2022 and could trigger an overall correction into March ‘22. The NQ-100, Russell 2000 & DJTA reached multi-month upside targets in Nov ’21 and signaled a wave ‘5’ peak on various levels – signaling that those highs could hold for many months (or longer) and trigger the largest declines since March ‘20.
How Does This Impact 10, 20 & 40-Year Cycles Colliding in 2022?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.