Stocks Begin Sell-offs in 3Q ’23 ‘Danger Period’! Russell 2K Leading Reversal Lower.
08/09/23 – “Stock Indices peaked and reversed lower in late-July/early-August ‘23, turning daily & intra-month trends down as a significant ‘danger period’ began. That initially validates intermediate cycle highs and the potential for a multi-week sell-off. A vulnerable period extends into late-Aug ’23.
The DJIA spiked higher on Aug 1/2 – fulfilling a ~1.5-month low-high-high-(high) Cycle Progression and a series of ~3-month (90-degree) moves from successive highs on Nov 1/2, Feb 1 & May 1, ’23. It has since sold off but needs the intra-month trend to turn down in order to validate that peak. (A subsequent high would be expected in mid-Sept ’23… the same time energy markets are projected to peak.)
Coinciding with that peak, the Russell 2000 reached its 3 – 4 month upside targets (stemming from its March ’23 low) at 2000 – 2015/QRU. As illustrated in the above monthly chart, that also had the Russell 2000 peaking in lockstep with its rising monthly 40 High MAC and its declining monthly 21 High MAC (see Aug ’23 INSIIDE Track for additional analysis and illustrations).
As described over the past month, the Russell had been targeting a new rally into the end of July ’23 – the fulfillment of a ~6-week low-low-high-(high) Cycle Progression, successive 18-week advances, and a 25-week high-high-(high) Cycle Progression. Price/time indicators corroborated that…
The Russell 2000 attacked its monthly LHR in June ’23, reinforcing the likelihood for a subsequent peak in July or Aug ’23. If that high was just set, it would fulfill a 20-month low-high-(high; July ’23) Cycle Progression in the Russell, DJTA, S+P Midcap 400, and many stocks.”
Stock indexes are fulfilling ongoing analysis for multi-month peaks to take hold in late-July/early-Aug ’23 and enter a vulnerable ‘danger period’ that could/should spur sharp sell-offs once trigger points are activated. As it did in Nov ’21, the Russell 2000 could be leading this transition as it fulfilled multi-month upside targets in late-July ’23 while maintaining its intra-year down/neutral trend status – setting the stage for a new multi-month decline.
It also peaked right at is converging monthly 21 & 40 High MACs – the upper ranges for its 3 – 6 month and 6 – 12 month trading ranges… providing many of the ‘ideal’ criteria for a major ‘B’ wave rally to peak and a large scale ‘C’ wave to begin. An initial decline should take it lower into the second half of Aug ’23. A subsequent bounce into mid-Sept ’23 would then usher in a second, more significant ‘danger period’.
Is the Russell 2000 the ‘Canary in the Coal Mine’… or an Outlier?
What is the significance of Monthly 21 & 40 High MACs being tested and holding?
Is this a ‘Major ‘B’ Wave Peak’ in at least one key index??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.