Stock Trading: Stocks Hold 6 – 12 Month Downside Targets; Signal Reversals.
06/29/22 Weekly Re-Lay Alert – “Stock indices initially rallied and are now pulling back after plunging into mid-month while fulfilling daily & intra-month downtrends and 2-Year Cycle parallels. During the initial bounce, the DJIA turned its daily trend up – while most other indexes twice neutralized their daily downtrends but could not turn them up – setting the stage for a 2 – 3 day reactive sell-off to begin this week.
Based on those daily trend patterns, some stocks could retest their mid-June lows as the DJIA (and others) would likely pull back to a secondary/higher low. That would create a divergent low and the potential for a sharper rally…
The three primary indexes (DJIA, S+P 500 and NQ-100) are at or above 6 – 12 month downside targets – the ideal levels for multi-month lows to take hold and potentially spur a rebound (on balance) into Sept ‘22.
The DJIA has that support at 29,200 – 29,600/DJIA, the S+P 500 at 3560 – 3610/SPX and the NQ-100 at 10,700 – 11,100.
From a timing perspective, stocks bottomed during the ideal time based on 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).
The Nasdaq-100 corroborated that, fulfilling a 14 – 15 week high-low-low-(low) Cycle Progression and a related 28 – 29-week low-low-high-(low) Cycle Sequence. It also completed successive 11-week declines – the ‘3’ and ‘5’ waves of what is likely a larger-magnitude ‘A-B-C’ decline (Nov ’21 – June ’22 = ‘A’ wave and subsequent rebound would be ‘B’ wave).
The impending monthly closing prices should again have a significant impact on what to expect in Sept/Oct ’22… That is why the June 30 closing price should be revealing (helping to clarify what to expect during the anticipated Sept/Oct ’22 cycle high).
On a near-term basis, stock indexes are showing signs of forming 2 – 4 week bottoms with the DJIA turning its daily trend up (that prompted a 2 – 3 day reactive pullback). Almost all indexes (except the DJIA, which is a little stronger) pulled back to weekly support into mid-week and held – showing some resilience.
To confirm multi-week lows, these indices need daily closes above 31,900/DJIA, 3950/ESU & 12,270/NQU.
That could/should prompt 1 – 2 month surges to their June & July ’22 monthly LHR levels at [reserved for subscribers]…”
Stock indexes are validating the potential for a mid-June low and the onset of a multi-week and multi-month advance. They reached 6 – 12 month downside targets in June – fulfilling the overwhelming majority of downside price potential for the first 9 months of 2022. Focus is slowly shifting to Sept ’22 and what could be the most decisive 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 bottoming on June 13 – 21!
How 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.