Stock Market: Russell 2K Attacks/Holds Major (6 – 12 Month) Target at 1710/QR.

05/21/22 Weekly Re-Lay – “Stock indices have fulfilled multiple downside targets after plunging from cycle highs on April 19 – 21.  They have initially created a divergent bottom (May 12 & May 20 lows) after most indexes matched the duration of their three previous, successive declines while attacking multi-month downside range targets…

Stock Indices are creating the kind of divergent low, on a 1 – 2 week basis, that was described earlier this week.  Friday’s late-day rebound helped to reinforce this possibility but much more validation is needed.  The Russell 2000 is the current benchmark index – from a technical/cyclical perspective – being closely monitored for signs of a low.

That is a result of this index dropping from its projected wave ‘5’ peak (in Nov ’21) to the primary downside range-trading target at 1710/QR.  Ever since it peaked near 2460/QR in Nov ’21, the 6 – 12-month downside range target has been at 1710/QR… which was finally reached on May 12 as multiple timing indicators reached fruition.  (In late-April, 1710/QRM also became the 2 – 4 week downside range target.)

At that point, the Russell 2K fulfilled that pair of downside range-trading targets while completing a 50% retracement of the entire 2020/2021 advance.  That also has this index retesting the level of BOTH the late-2018 and early-2020 peaks – the two most significant tops prior to 2022.

That is a decisive level of resistance-turned-into-support AND the ideal level near which a 1 – 2 month (minimum) bottom should take hold.  It was also the intermediate downside wave objective where the latest decline (late-March – May 12) would equal the prior (Jan/Feb ’22) decline – a textbook ‘c = a’.

The DJIA & S+P 500, similar to the Russell, also attacked the levels where their latest declines equal the magnitude of their Jan/Feb ’22 declines.

Stock Indexes initially sold off to monthly support into May 12 – the downside targets for the intra-month trends and the time when the latest decline matched the duration of three previous declines (15 – 16 trading days).  That led to an initial rebound with most indexes failing to signal a low… and setting the stage for a divergent low around May 20 – potentially repeating a recurring pattern.

In a majority of months since May ’21, stocks have set multi-week peaks in the opening days of each month and then seen 1 – 2 week declines.  In many of those instances, subsequent lows were set around the 19/20th of the month (May 19, June 18, July 19, Aug 19, Sept 20 & Dec 20, ‘21).

In May ’22, they repeated the first part of that pattern – bouncing into May 3 and setting an intra-month top.  They sold off and are now poised to repeat the final part of that pattern – setting a low around the 20th of the month.  They need to close above the May 17/18 highs to signal a bottom.”


The Russell 2000 has attacked its 6 – 12 month & 3 – 6 month downside target at ~1710/QR – a decisive objective that has been discussed since the Russell 2K reached its major, upside (5th wave) objective at 2460/QR in Nov ’21 and signaled a 6 – 12 month (or longer) peak.  Now that it has fulfilled that analysis and decisive downside target, the Russell could begin to lead a bottoming process in equities.  On an intermediate basis, the next peak is expected in late-May/early-June ’22.

On a broader basis, stocks remain in a major topping process – fulfilling the outlook for a decisive peak in early-Jan ’22 followed by a multi-month plunge to begin 2022.  That is just the start of a massive shift projected for 2022 – ultimately leading to market jolts in late-2022 through late-2023.  An overall 4 – 5 month decline was/is expected between that Jan ’22 cycle peak and the next (Sept/Oct ’22) cycle peak.

What Does Russell 2K Action Portend for Other Indexes?

Will Another Sell-off Follow Late-May/early-June ’22 Cycle Peak??

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.