Stock Market Cycle Low: Feb 23/24 Bottom Expected; Then Rally into Early-March.
02/23/22 Weekly Re-Lay Alert – “Stock Indices have sold off after rebounding into early-Feb – when daily cycles and daily/weekly trend indicators projected a secondary high and reversal lower. That was the second phase of expectations built around the 2-Year Cycle and corroborating 2-month, 4-month & 8-month cycles.
They all peaked in early-Jan ’22 and projected a multi-week plunge, similar to events in January 2010, 2014, 2016 & 2018. That was the first phase, culminating with an initial low on Jan 24 – 28 – in perfect sync with weekly trend patterns in most of the indexes. What was stated at that time – in regard to the weekly trend patterns (and the corroborating 4-Shadow signals generated in January) – remains intact:
1-26-22 – “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…
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… 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… 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 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… 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.”
1-29-22 – “Stock Indices are showing some signs of an intermediate low after 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 forecast a more significant peak and reversal lower in early-Jan ’22…
The S+P 500 and Nasdaq 100 indexes reversed their weekly trends to down, portending a likely bottom on Jan 24 – 28 that was in sync with the DJIA weekly trend…
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…
Stocks spiked to new lows and reversed higher this past week, adhering to the normal weekly trend pattern and fulfilling daily cycle lows in the NQ-100 (bottoming on Jan 25 – 27). This action also validates the potential for secondary highs to be set in the early days of Feb ‘22. As long as stocks continue their recent rebounds, they could spike higher and set early-Feb. ’22 peaks.”
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Stock indexes rebounded from Jan 24 into Feb 2/3, fulfilling that analysis and peaking in precise alignment with daily and monthly cycles. In the case of the NQ-100 (and related indexes), that projected a subsequent drop to new intra-year lows – the third phase of this early-2022 outlook. That was corroborated by the fact it bounced right to its declining weekly 21 Low MAC and immediately reversed lower – a bearish indicator.
The Nasdaq-100 is fulfilling that and could drag other indexes lower. However, if those other indexes can spike down and reverse higher without closing below their Jan 24 lows, it would usher in another brief bounce – similar to the late-Jan/early-Feb ’22 rebound.
The S+P 500 is reinforcing the significance of current levels as it retests decisive range-trading support near 4200/ESH. As conveyed in the Feb ’22 INSIIDE Track:
1-31-22 – “Since July ’21, the S+P 500 has had its own range-trading parameters, rallying from ~4,200 to ~4,500 and back toward ~4,200. It then rallied into Nov ’21 before pulling back and setting lows near 4,500/ESH.
That spurred a final rally to ~4,800 before a plunge back to ~4,200/ESH – reinforcing these ~300 point ranges (4,200 – 4,500 – 4,800/ESH). The Jan 24 low near 4,200 has spurred a quick surge to ~4,500/ESH – a pivotal level of intermediate resistance.”
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The S+P peaked in early-Feb ’22 without providing a confirming weekly close above 4,500/ESH and has since sold off back to support from July ’21 & Jan ’22 – at ~4,200/ESH. There are other (monthly & weekly) support levels that increase synergy around 4,200/ESH. However, the weekly close is the true determinant of whether or not this support is holding. So, a sharp spike below that level could occur… and give way to a bounce into Friday’s close that holds this support.
Monthly support comes into play around 4206/ESH and was corroborated with last week’s HLS at 4200/ ESH. Since the S+P 500 plunged right to its monthly HLS in January (~4235/ESH) and held, it heightens the significance of monthly support in the following month. That is where that index now finds itself.
At the same time, the DJIA & NQ-100 are also poised to spike below monthly support levels since it took them until later in the month to accomplish this. The indexes are now 1 month/~30 degrees from their Jan 24 lows and ~1 month/~30 degrees before the 2-year anniversary of the March 23, ’20 lows (a cycle that could portend a related intermediate low around March 23, ’22). That could trigger a 1 – 2 week spike low.
Although the Russell 2000 is a day beyond its 24-day high-low-low Cycle Progression, the corresponding 17 – 18 trading-day high-high-low-low Cycle Progression projects a low on Feb 23/24. The bottom line is that key stocks & indexes are fulfilling their weekly trend price (downside) objectives and are in the time when a new multi-week low is most likely to take hold.
A final spike low is possible and could, in an extreme case, see the NQ-100 reach [reserved for subscribers]”
Stocks are fulfilling the outlook for a decisive peak in early-Jan ’22 followed by a 2 – 3 month plunge into Feb/Mar ’22 before a multi-month low becomes more likely. Daily & weekly cycles converge and portend a multi-week (or longer) low on Feb 23/24 followed by a quick, sharp rally.
That is unfolding at the same time Gold had been forecast to see an accelerated advance into late-Feb/early-March – presaging the geopolitical tensions that are now unfolding and could time the culmination of those 4Q ‘21/1Q ’22 trends.
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.