Stock Market Outlook: ‘Largest Rallies of 2022’ Forecast for 3Q ‘22!
08/03/22 Weekly Re-Lay Alert – “All of this action further confirms cycles that bottomed on June 13 – 21 – at the same time several indexes spiked to 6 – 12 month downside targets and fulfilled almost all of the downside potential (price AND time) for the first 7 – 9 months of 2022.
In the case of the DJIA & NQ-100, they bottomed precisely at 1 – 2 year support levels near 29,600/DJIA & 11,000/NQ. The Nasdaq-100 (and most other indexes) fulfilled weekly cycles and downside wave timing targets with their mid-June lows.
The June 30 ’22 monthly closes reinforced that analysis, signaling that a multi-month bottom was taking hold and a 1 – 3 month reactive rally was imminent. Since that time, stock indices were/are expected to experience their largest rallies of 2022 – exceeding ~32,800/DJIA, 4180/ESU and 13,400/NQU.
The Russell 2000 has just fulfilled the same minimum objective, rallying for slightly more than it did in Feb/Mar ’22 and right back to its early-June ’22 high… as well as its Jan ’22 low – the low of the year-opening range.
The S+P Midcap 400 has done the same – fulfilling its minimum 2 – 3 week and 1 – 2 month upside targets while retesting its early-June high and late-Jan ’22 low. The DJTA did not exceed the magnitude of its previous rally but did also test its early-June high and late-Jan ’22 low – reinforcing the significance of this week.
All of those indexes are showing that ideal upside targets – for the July 14 (1 – 4 week) buy signals – are being met. That doesn’t automatically signal a top but does show that a top is [reserved for subscribers]…
Reinforcing these upside targets in the three primary indexes, recent action has projected likely tests of 33,400/DJIA, 4250/ESU & 13,400/NQU for early-Aug.
In the case of the NQ-100, it is building a lot of synergy – of both upside targets and intermediate resistance zones – around that 13,400/NQU level. Weekly resistance for the current week came into play at 13,326 – 13,441/NQU and is being corroborated by the Intra-week PLLR as well as the weekly 21 High AMAC. And now, daily extremes are reinforcing those targets…
The latest three daily LHRs began to group together (13,343 – 13,575/NQU) and steadily hone that target. Tomorrow’s HHR is a little higher – at 13,523/NQU (the LHR is at 13,806/NQU).
The S+P 500 has had similar target reinforcement and just corroborated that by rallying to ~4165/ESU today (it peaked at 4170/ESU) and creating another LHR for tomorrow – at 4260/ESU. This comes after it created an Intra-Week PLLR – with the Aug 2 low at 4080 – at 4247/ESU, right where weekly resistance exists. This index could be the key to an impending top.
The DJIA’s daily LHR is at 33,437/DJIA – right where its weekly resistance begins. The ideal scenario would have these indexes [reserved for subscribers]…
1 – 4 week & 1 – 2 month traders could have entered long positions in stock indexes during the July 14 sell-off as the indexes retested their early-July lows. Futures traders could have entered indexes with the same approach (entering longs down to their July 1/5 lows, like 3745/ESU).
Risk (exit on) a daily close below the Aug 2 lows. 1 – 4 week traders can exit all of these positions at 33,400/DJIA, 4245/ESU, 2620/IDX & 1970/QRU. 1 – 2 month traders can exit 1/2 of longs at the same levels.”
Stock indexes are reinforcing July 14 buy signals – projected to trigger an initial 3 – 4 week advance and as part of a larger overall advance. In the first part of August, they are expected to reach 33,400/DJIA, 4250/ESU, 13,400/NQU, 2620/IDX & 1970/QRU. This intensifies focus on Sept ’22 and what could be the most decisive time of this year.
On a broader basis, stocks powerfully fulfilled projections for a decisive peak in early-Jan ’22 followed by a multi-month plunge in the first half of 2022. An overall 4 – 5 month decline was/is expected between that Jan ’22 cycle peak and the next (Sept/Oct ’22) cycle peak… ideally bottoming on June 13 – 21! That is when stocks bottomed and produced their first reversal signal. July 14 produced the second.
How Do the July 14 Buy Signals Corroborate 3Q ’22 Outlook?
Why is Sept ’22 Such a Decisive Period in the 2022/2023 Outlook??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.