Stock Market Sell-off Phase III; Early-Feb (Lower) High Poised to Trigger New Sell-off.
02/05/22 Weekly Re-Lay – “Stock Indices are screaming ‘Congestion!’ as they trigger successive, competing signals – between daily & weekly trends, daily & weekly 21 MACs, and even among the various indices. They fulfilled the ongoing outlook for divergent highs in early-Jan ’22 and then fulfilled the 2-Year Cycle (and 2-month, 4-month & 8-month cycle) outlook for a January ’22 sell-off.
Expectations for that sell-off had been reinforced with the Nov/Dec ’21 declines, which triggered 4-Shadow Signals in most indexes. That signal projected sharper sell-offs (than the Nov/Dec declines) after an intervening bounce.
In line with weekly trend patterns, the 2-Year Cycle, and daily cycles in the NQ-100 and some other indexes, stocks set an intermediate low and reversed higher on Jan 24 – 28, closely paralleling what has been seen in so many other Januarys – on a 2-Year Cycle basis.
Since then, the outlook was for a sharp rebound into Feb 2 – 4, when a secondary high was most likely (one that should hold at least 1 – 2 weeks). They precisely fulfilled that, leaving it up to the new intra-month trends to determine whether those highs would more likely hold for just 1 week… or for several weeks.
So far, the intra-month trends are neutral – except for the DJTA (which turned down on Friday)… Stocks rallied sharply from their Jan 24 lows, spiking higher into Feb 2 while perfectly fulfilling daily cycles that continue to time 1 – 2 week and often 1 – 2 month highs in the opening trading days of the month (dating back to May ’21).”
Stocks are adhering to the outlook for a decisive peak in early-Jan ’22 followed by a 2 – 3 month plunge in 1Q ‘22. That was forecast to trigger the more dynamic (and usually more devastating) ‘C’ wave declines in Jan/Feb ’22 with an intervening (lower) high expected in early-Feb. Stocks are poised to repeat a pattern seen in most months since May/June ’21 in which an intra-month high is set early in the month and a sell-off into the second half of the month (usually bottoming within a few days of the 20th) follows.
That is set to unfold at the same time Gold has been forecast to see an accelerated advance into late-Feb/early-March – hinting at more trouble on the horizon during the month of Feb ‘22. Geopolitical tensions are beginning to validate what has been projected since Oct/Nov ’21.
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. That warned of trouble at the same time metals were projecting strong 3 – 6 month surges after bottoming in late-Sept ’21.
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.