Stock Trading: Stocks Reinforcing Multi-Month Lows; Watch Sept ’22!
07/02/22 Weekly Re-Lay – “Stock indices are slowly validating signs of bottoming (in mid-June), after spiking to new lows and 6 – 12 month downside targets during the optimum time for the latest intermediate low (June 13 – 20) – based on typical cycle movement. This could be the start of a multi-month rally into monthly cycle highs in Sept/Oct ’22 – when the next decisive peak is forecast…
Stock Indices initially rallied and then pulled back after plunging into mid-month while fulfilling daily & intra-month downtrends and 2-Year Cycle parallels. More important, from a 1 – 2 year trend perspective, the DJIA, S+P 500 & S+P 400 turned their monthly trends down (a lagging/confirming indicator that often times an initial low) – joining the NQ-100 and Russell 2000, which had done the same in May ’22.
As explained in the July ’22 INSIIDE Track, the last time most stock indexes turned their monthly trend down was in early-2008. The last time they were in monthly downtrends was in April 2009. During sell-offs in 2010, 2011, 2015/16, 2018 & 2020, most indexes dropped far enough to neutralize their monthly uptrends – two or more times – but not enough to turn those trends down.
This is a powerful validation to ongoing analysis (since mid-2021) for a major divergent top in early-Jan ’22 followed by the largest decline since Feb/ Mar ’20. Ultimately, it should exceed that decline.
As for the intermediate outlook, the three primary indexes (DJIA, S+P 500 and NQ-100) remain at or above 6 – 12 month downside targets – where multi-month lows are most likely to occur (and spur an overall rebound into Sept ‘22).
The DJIA has related 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 next rebound would be ‘B’ wave).”
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.