Stock Market Sell-off Emerging; Jan 12/13 High Should Trigger New Decline.
01/12/22 Weekly Re-Lay Alert – “Stock Indices sold off after fulfilling analysis for intermediate highs in early-Jan. The index that often leads these reversals, the DJTA, rallied to short-term resistance (~16,600) and set an initial high on the second trading day of the month – perpetuating the same cycle that was in focus in most indexes.
That is the same day (in the respective months) in which the DJTA previously peaked – creating a precise ~2-month/~60-day high-high-high-(high) Cycle Progression that included prior highs on the second trading day of the month in July, Sept. & Nov. ’21.
It has since sold off and twice neutralized its daily uptrend – while testing and holding monthly support (15,719 – 15,828/DJTA), its rising weekly 21 High MAC AND its weekly HLS (extreme downside target for this week – at 15,818/DJTA). The Transports would not turn their daily trend down – and signal a higher magnitude correction – until a daily close below 15,753/DJTA…
As stated last week, the S+P 500 had weekly cycles portending a low on Jan 10/11, but could spike below 4600/ESH first. It dropped into Jan 10 and bottomed while spiking below the convergence of weekly & monthly support AND its daily HLS – all at 4589 – 4593/ESH…
At the same time, the DJIA spiked down to its daily HLS, daily 21 Low MAC AND 21 Low MARC support and weekly support while setting an early-week low. It did, however, turn its daily trend down in the process – ushering in the normal 2 – 3 day reactive bounce that usually follows that signal. It needs a daily close above 16,450/DJIA to neutralize that new daily downtrend…
Both the Russell 2000 & NQH fulfilled expectations for a spike to monthly support levels (15,492 – 15,737/NQH & 2136 – 2158/QRH) – indicating that they have fulfilled the downside targets associated with their monthly downtrend signals. They rebounded with the NQH bouncing into Jan 12/13 – the latest phase of the 11 – 12 trading day high-high-high-high Cycle Progression that helped time the late-Dec. peak.
The next phase of that short-term cycle comes into play on Jan 31 – Feb 2, the same time the S+P has a convergence of multiple weekly cycles aligning… it would project a subsequent high for the week of Jan 31 – Feb 4 – a peak that would fulfill broader cycles and potentially usher in a larger correction.”
Stocks are adhering to the outlook for a decisive peak in early-Jan ’22 followed by a new multi-month decline to follow. That was expected to usher in the more dynamic (and often more devastating) ‘C’ wave declines in Jan/Feb ’22 with an intervening (lower) high expected in early-Feb. This action is initially corroborating the outlook for a dramatic shift in 2022 and could trigger an overall correction into March ‘22.
The NQ-100, Russell 2000 & DJTA reached multi-month upside targets in Nov ’21 and signaled a wave ‘5’ peak on various levels – signaling that those highs could hold for many months (or longer) and trigger the largest declines since March ‘20.
How Does This Impact 10, 20 & 40-Year Cycles Colliding in 2022?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.