Stock Market Poised for Rally into Aug 15/16 Cycle High; Then What?
08/10/22 Weekly Re-Lay Alert – “Stock Indices continue to rally, confirming mid-June bottoms and validating the outlook for an overall advance into Sept ‘22. They were expected to enter a bullish multi-week phase on July 14 and then rally into early-Aug – which was fulfilled. Early-week action ushered in the onset of a new advance.
The Aug 6 Weekly Re-Lay described the ideal scenario in this manner:
“Stock Indexes initially fulfilled intermediate projections for a multi-week advance – based on daily 21 MAC/MARC structure, intra-month trend set-up, and corroborating daily cycle lows – from July 14 into Aug 1 – 5. However, that initial peak is not expected to hold for too long.
Monday’s action should provide some short-term clarification but the more likely scenario appears to be that stock indexes could pull back on Aug 8 and possibly Aug 9, before resuming their advances.
If they are to remain bullish on a short-term basis, they should not turn their intra-month trends down and would ideally remain above their rising daily 21 High MACs during an impending pullback.
The greatest (and tightest) synergy of daily support levels appears in the NQ-100 and could see it pulling back to 12,943 – 12,986… then quickly reversing back up. That would be the most bullish case for the next 1 – 2 weeks and could ultimately reinforce its intra-month uptrend.”
The Nasdaq-100 pulled back to 12,963/NQU and bottomed on Aug 9 – fulfilling the ideal timing and price for an early-week pullback. That provided another short-term opportunity for 3 – 5 day traders with stocks projected to enter another rally into (at least) mid-month.
A rally into Aug 12 – 16 would fulfill the timing projection from the intra-month uptrends. It would also perpetuate a ~1-month/~30-day cycle. Over the past several months, many indexes have set multi-week lows on the 12 – 16th of the month – coming on March 14/15, April 12, May 12, June 16 & July 14.
This cycle is overdue for an inversion, so a high on Aug 12 – 16 would fulfill a related ~1-month low-low-low-low-(high) Cycle Progression and likely usher in a 1 – 2 week period of consolidation. That would then set the stage for a subsequent peak on Sept 12 – 16 – a ~1-month low-low-low-low-high-(high) Cycle Progression.
The primary indexes have been forming a second (higher) intra-month target zone that now also includes the current weekly LHRs and the Intra-month PLLR levels. These come into play at 34,237 – 34,631/DJIA, 4xxx – 4xxx/ESU & 1x,xxx – 1x,xxx/NQU.
1 – 4 week & 1 – 2 month traders (futures and cash) could have entered long positions in stock indexes during the July 14 sell-off as the indexes retested their early-July lows.
Risk (exit on) a daily close below the Aug 9 lows. 1 – 4 week traders can exit 1/2 of these positions at 33,400/DJIA, 4260/ESU, 2620/IDX & 1970/QRU and 1/2 at 34,200/DJIA… 1 – 2 month traders can do the same.”
Stock indexes are nearing fruition of the July 14 buy signals – projected to trigger a 3 – 4 week advance and as part of a larger overall advance. A brief pullback into Aug 9 was likely with the NQU expected to test and hold ~12,980 and then rally into mid-Aug. That just took place and triggered a new 3 – 5 day signal, projecting a rally into Aug 15/16. This would heighten the 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 – which should culminate on/around Aug 15/16… the second ‘1/3’ of this overall scenario.
Can the July 14 Buy Signals Spur More Upside into Aug 15/16?
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.