Stock Market (Early-Jan ’22) Cycle Highs & 4-Shadow = Danger Period.
01/05/22 Weekly Re-Lay Alert – “The DJTA rallied to short-term resistance (~16,600) and set an initial high on the second trading day of the month – precisely perpetuating the ~2-month/~60-day high-high-high-(high) Cycle Progression that previously timed highs on the second trading day of the month in July, Sept. & Nov. ’21…
The new intra-month trends are now the key. It would take daily closes below the current intra-month lows (the lowest point of Jan 3 – 5 in each index) to turn the intra-month trends down and project additional selling into mid-month and/or to monthly support.
The intriguing thing about an index like the NQ-100 is that it just dropped to its monthly support (15,492 – 15,737/NQH) while twice neutralizing its daily uptrend. It would not turn that daily trend, nor the intra-month trend, down until a daily close below 15,752/NQH.
The NQH has divergent short-term cycles, including an 11 – 12 trading day high-high-high-high Cycle Progression that helped time its late-Dec. peak. It could also be forming an opposing 11 – 12 trading day low-low-low Cycle Progression if it bottoms now… If that occurs, it could spur a rebound to a lower high next week.”
Stocks are adhering to intermediate cycles and the outlook for a bounce into early-Jan ’22 before a new sell-off becomes very likely. The DJTA just fulfilled a potential peak, perpetuating multiple cycles with a peak on the second trading day of Jan ’22.
That could usher in the more dynamic (and often more devastating) ‘C’ wave declines in the coming weeks, following an early-Jan ’22 divergent peak. Continued divergence is expected as the equity markets prepare for what could be a dramatic shift in 2022.
The NQ-100, Russell 2000 & DJTA reached multi-month upside targets in Nov ’21 and signaled a wave ‘5’ peak on various levels. At the very least, that projects subsequent ‘A-B-C’ declines with the ‘A’ legs recently unfolding and the ‘B’ waves projected to peak in early-Jan. ’22. The ‘C’ waves are now poised to begin.
Why Does early-Jan ’22 usher in such a dangerous period for stocks? What does this mean for impending ‘C’ wave declines in a majority of (weaker) indexes??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.