Stocks Approaching 1 – 2 Year Upside Targets; Focus on February 9/12th.
01/31/24 – “Opening ranges play a key role in analyzing the markets. That has been evident in many trading systems (like Market Profile, which was heavily used by day traders in the 1980’s & 1990’s) and/or approaches to analyzing and timing market movement & swings.
The intra-month & intra-year trends are an example of these.
Another involves a tactic I have used for the past ~30 years, providing swing points or confirmation points throughout the year. This was originally described in a pair of articles I published in the early-1990’s – using a Gann-like breakdown of each year in which every ~40 days (which has its own significance) represents 1/9th of the year… and every three of those times 1/3rd.
The first two are the most important – timing inflection points around February 9/10 (the completion of the first 40-day period – a period of ‘testing’ or ‘preparation’) and around March 20/21 (the completion of the second 40-day period and also the Vernal Equinox – the completion and beginning of the Natural Year).
There are certain years – like 2024 – when related, corroborating cycles heighten the focus on those time frames. Potentially, one of the more significant ones is that in Gold, Silver & the XAU – with intermediate cycles converging in the days surrounding February 9th…
While all of this could be the result of the normal ebb and flow of market action, there are enough other factors to hint that an external event could be the impetus for part of these moves.
The action leading into February 9/10 is as critical as what follows.
Stock Indices are showing significant divergence at the highs with the weaker indexes (DJTA, Russell 2000 & S+P Midcap 400) remaining below their mid-Dec or late-December peaks as the DJIA, S+P 500 & Nasdaq-100 rallied into late-January… Stock indexes are in the time frame when the 2-Year Cycle has timed a multi-month high in 2018, 2020 & 2022…
There is a nearly-ubiquitous cycle in the Nasdaq-100 that corroborates this. For the past ~two decades, the NQ-100 has consistently traded in 14 – 15-week and 28 – 29-week cycles – swinging from high – low, low – high, high – high, and/or low – low in these intervals. [Several reports were published in early-2009, detailing how the convergence of these cycles was projecting a major bottom for March 2009.]
The 28 – 29-week cycle is the one in focus for this discussion. That ~6.5-month cycle has timed the swings from the mid-May ’21 low to the Nov 2021 peak to the mid-June ’22 low to the late-Dec/early-Jan ’23 low to the mid-July ’23 high to the current time frame – when an intermediate peak is likely…
This week’s action is calling into question the weekly trend signal in the Russell 2000.
After declining into mid-January ’24 and holding key levels of intermediate support while twice neutralizing its weekly uptrend, the Russell 2000 reversed higher and triggered a weekly 2 Close Reversal higher – projecting 2 – 3 weeks of upside and a likely retest of its Dec. ’23 high.
Along with other indexes, it surged to its weekly LHR on January 22 – 26th, signaling that a 1 – 2 month peak should take hold in the ensuing 1 – 2 weeks. That reinforced the window of opportunity for the Russell 2000 and coincided with its rebound into late-January (fulfilling its intra-month trend structure).
However, it could not reach its early-month high and is showing renewed signs of vulnerability during this precarious time for equity markets. If it gives a daily close below 1931/QRH – or a weekly close below 1938/ QRH – the Russell 2000 would signal a higher magnitude decline and remove the potential for a retest of its recent high.
That warrants the reiteration of other factors…
This potential peak was preceded (presaged?) by weaker indexes like the DJTA… which has played the same role since the late-1990’s when it peaked in May 1999, 8 – 10 months before the DJIA, S+P 500 & Nasdaq. (By the time those indexes peaked, the DJTA had already lost about 30% of its value.) It played that role again in 4Q 2014, Sept 2018 & January 2020.
The DJTA peaked in July 2023, perpetuating a ~5-month low (April ’22**) – low (Sept ’22) – high (Feb 2023) – high (July 2023) Cycle Progression – that projected a lower high 5 months later… in December 2023.
**The April 2022 low was also 5 months after the November ’21 peak – completing an initial ~5-month decline that ‘set’ that cycle and represented the midpoint of the overall ~10-month decline into Sept 2022.
That Sept 2022 low was followed by the ~10-month rebound into July 2023 – that retraced .786 (2nd Degree Golden Ratio) of the initial decline – the textbook rally for a ‘2’ or ‘B’ wave bounce.
After declining and rebounding into Dec ’23 – another bounce that peaked at the .786 (2DGR) rebound level – the DJTA sold off but has not yet turned its weekly trend down (needed to confirm the Dec ’23 peak).
That could trigger a ~5-month decline into May ’24 – fulfilling a ~5-month high (Feb 2023) – high (July 2023) – high (Dec ’23) – (low; May ’24) Cycle Progression and representing the second half of an overall ~10-month decline from the July ’23 peak (matching the ~10-month decline of Nov ’21 – Sept ’22; ‘C’ = ‘A’ declines).
May/June 2024 is also the next phase of a 50 – 51-month low (Oct 2011) – low (Jan 2016) – low (March 2020) – (low; May/June 2024) Cycle Progression that has timed all of the major bottoms since 2010.
There are many other markets pointing to ~May 2024 as the culmination of something potentially ‘big’ in the financial (and possibly geopolitical) realm. Whether that is a ‘black swan’ event in April/May ’24 – that triggers big swings in a few weeks (like Feb/March 2020) – or something that steadily impacts the markets from Feb into May 2024, remains to be seen.
For now, stock indexes need to be monitored closely for additional signs of a top and reversal lower. The DJTA, Russell 2000 & S+P Midcap 400 failed to turn their initial intra-year trends up, reinforcing the pivotal nature of this week and next.”
Stock Indexes have rallied into the latest phase of the uncanny 2-Year Cycle in January/February 2024.
The DJIA is approaching its 1 – 2 year upside target at 39,000 – 39,200 as the NQ-100 has initially tested its respective 1 – 2 year upside target at 17,800 – 18,200/NQ (stemming from multi-year bottoming signals in late-2022). In late-December ’23, the Russell 2000 attacked its 1 – 2 year upside target at 2085 – 2100… so it has already fulfilled a major objective and is trying to confirm a multi-month top.
Weekly cycles, LHRs, and other timing indicators project a pivotal time surrounding February 9/10, 2024 – the completion of the initial ‘period of testing’ for 2024.
What Would Signal a Multi-Week Peak? …a Multi-Month Peak??
Why is February 9/12th Pivotal for Equities?
Why is April/May 2024 Pivotal for Stocks?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.