Stock Market Poised for Sell-off; Aug 16 Peak Triggers Exit Signal in Longs.
08/22/22 INSIIDE Track Update – “Stock indices did spike higher last week – all part of the projected advances from mid-June ’22 (multi-month cycle low) and from mid-July (multiple buy signals triggered) into an expected multi-month peak in Sept ‘22.
As part of that, a 1 – 2 week peak was projected for Aug 15/16 and took hold as the DJIA reached its second upside target for the mid-July buy signals (34,200; the level for Weekly Re-Lay traders to exit the second 1/2 of long positions… other indexes triggered this profit-taking signal on Aug 19).
That also had the DJIA precisely reaching its monthly resistance (34,228/DJIA) at mid-month – the textbook scenario and objectives for an intra-month uptrend (rallying into mid-month and up to monthly resistance).
The Aug 13 Weekly Re-Lay explained why stock indices should spike higher into Aug 15/16 and set a multi-week peak at that time – completing the second ‘third’ of a ~3-month advance – with the DJIA projected to reach 34,200:
“Stock Indices continue to move in lockstep with short-term cycles, trend signals, and corresponding support and resistance. They were projected to pull back on Aug 8 & 9 and then reverse higher, resuming their advances and next rallying into mid-Aug. The NQ-100 was forecast to pull back to 12,943 – 12,986/NQU and then surge again. The S+P 500 had related support at 4104 – 4115/ESU…
The Nasdaq-100 pulled back to 12,963/NQU (S+P hit 4113/ESU) 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 a new rally into (at least) mid-month.
All of this action confirms mid-June cycle lows and validates the outlook for an overall advance into Sept ‘22. Stocks were forecast to enter a bullish multi-week phase on July 14, which has unfolded.
A rally into Aug 12 – 16 would fulfill the intra-month uptrends and perpetuate a ~1-month/~30-day cycle that includes multi-week lows on March 14/15, April 12, May 12, June 16 & July 14… and should invert and time a related high on Aug 12 – 16. That would fulfill a related ~1-month low-low-low-low-(high) Cycle Progression and project a subsequent peak on ~Sept 12 – 16.
A spike high*** on Aug 15/16 should usher in a new 3 – 5 day peak… 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. 1/2 of these should have been exited at 33,400/DJIA, 4260/ESU (w/avg. gains of about $24,000/contract) & 1970/QRU. Risk (exit on) the other 1/2 on a daily close below the Aug 11 lows. Exit these at ***34,200/DJIA…”
Stock Indices surged from Aug 9 into Aug 16, fulfilling the latest bullish signal and the prevailing intra-month uptrends… which were portending rallies into Aug 15/16 (mid-month). A peak on Aug 15/16 was expected to fulfill a ~1-month low-low-low-low-(high) Cycle Progression and portend a subsequent peak on Sept 15/16 – a ~1-month low-low-low-low-high-(high) Cycle Progression.
All of these cycles were corroborated by the weekly trend action – from different perspectives – in the primary indexes. The NQ-100 reversed its weekly trend up on Aug. 12. That was expected to usher in an initial peak during the following week (ideally on Aug 15/16), after which a 1 – 3 week reactive sell-off is often seen.
In contrast, the DJIA & S+P 500 were not poised to turn their weekly trends up, so they were also in a position for a new 1 – 2 week setback.
Stocks precisely fulfilled that, peaking on Aug 16 as the DJIA was reaching its final upside target (and profit-taking level for the July 14 buy signal) at 34,200.
Corroborating all that, the DJTA had a 20-week high-high-(high) Cycle Progression emerging on Aug 15 – 19, when it would complete successive advances of 5 weeks each. It peaked on Aug 16.
That completed the second ‘third’ of this overall advance, projected to last from mid-June into Sept ‘22… with the greatest synergy of daily cycles in mid-Sept ’22.
(The first third was mid-June – mid-July ’22, when equities were building a base. The second third was the projected surge from July 14 into Aug 15/16. The final third is a projected high – high cycle between Aug 15/16 and Sept 15/16 – with a 1 – 2 week pullback in between.)
In many indexes, the July 14 – Aug 16 advances were the likely ‘3’ waves in an unfolding 5-wave advance into mid-Sept. (Various stocks and indexes have conflicting wave structures so this is only discussed to identify the following target/support.) If that is the case, they have entered their wave ‘4’ declines – which are often of similar magnitude to the preceding wave ‘2’ declines. (In other words, the two corrections have similar magnitude.)
If that is to be the case, the DJIA would drop to [reserved for subscribers]…”
Futures trading involves substantial risk. Past performance is no guarantee of future results.
Stock indexes completed the July 14 buy signals – fulfilling projected 3 – 4 week advances into Aug 15/16 and up to primary upside objectives – and triggered what is expected to be (at least) 1 – 2 week sell-offs from the Aug 16 peaks. Cycles in late-Aug are now in focus.
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 signal – triggering long positions that precisely fulfilled upside targets in price and time – culminating on Aug 15/16… the second ‘1/3’ of this overall scenario. The final ‘1/3’ has now begun!
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Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.