Stock Market Trading: DJIA & NQ-100 Attack 6 – 12 Month Downside Targets/Support!
06/18/22 Weekly Re-Lay – “Stock indices continue to sell off after fulfilling projections for a rally into June 3. They have extended this into mid-month and could see a spike low on June 20 – mimicking what has unfolded in a majority of months since May ’21. An intermediate low remains likely on June 13 – 20 and is expected to trigger a rebound into late-June/early-July…
Stock Indices have plunged after peaking in line with short-term cycle highs on May 27 and then June 3/6 – when a 1 – 2 week high was projected. They are repeating the pattern of many previous months – setting initial highs in the first 3 – 4 trading days of the new month and then dropping to new lows… they are lining up to repeat the second part of that pattern – bottoming around the 20th of the month.
They are also closely adhering to the 2-Year Cycle and its uncanny correlation to 2016 and the timing of so many extremes (highs or lows) and intervening swings. They bottomed in Feb and then topped on April 19 – 21 – just as they did in 2016. That led to a sharp drop into May 20 – the same time that stocks set a multi-week low in 2016 (May 19, 2016) – and a rebound into May 27 and ultimately early-June.
That is also what unfolded in 2016 before stocks sold off into June 16. In 2022, they have repeated that part of the pattern as well. That has brought them to a pivotal period from another perspective…
The Russell 2000 is spiking below its 6 – 12 month downside target (~1710/QR) – allowing time for the NQ-100 to attack its corresponding 6 – 12 month downside target (10,700 – 11,100) – where it reaches its yearly HLS, retraces 50% of its Dec ’18 – Nov ’21 advance, and tests the Sept/Oct ’20 lows – a type of 4th wave of lesser degree support.
It is also multi-year range-trading support tied to the NQ-100’s trading ranges of the past 20 years with multi-year lows set near 1,000, 6,000 & 11,000 and its major high near 16,000.
At the same time, the DJIA is attacking its most important level of resistance turned into support – the level of the Feb ’20 and Aug ’20 peaks at 29,200 – 29,600/DJIA – as the S+P 500 nears 3,600/SPX. At 3560 – 3610, the S+P tests its yearly HLS, matches the magnitude of its Feb/Mar ’20 plunge, and tests its Aug ’20 high – key resistance turned into support.
From a timing perspective, stocks have extended this decline into the more common duration for a decline following the 3rd or 4th phase of the ~8-Month Cycle (that timed the early-Jan ’22 peak). If a trend is turning, a market will often decline for 2/3 of the cycle (~5.5 months; June 13 – 21) – leaving time for the ensuing rebound – into the final phase of the 8-Month Cycle – to be 50% of the decline (~23 weeks down/~11.5 weeks up).”
Stock indexes are poised for a mid-June low and the onset of a subsequent multi-month advance. They have reached 6 – 12 month downside targets – the overwhelming majority of downside potential for the first 9 months of 2022. Focus is slowly shifting to Sept ’22 and what could be the most pivotal 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 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. Ideally, it would bottom on June 13 – 21!
Why Would a Mid-June Bottom Validate the ~8-Month Cycle?
Why is Sept ’22 Such a Key Period in the 2022/2023 Outlook??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.