Stocks Dropping From January 6th Cycle High; Portend Mid-January Low.
01/08/25 – “Stock indexes rebounded into January 6th, fulfilling upside projections and likely completing the rebounds from December 19th in the DJTA, Russell 2000 and S+P Midcap 400.
The DJIA, S+P 500 NQ-100 had already completed their rebounds on December 26th, as they fulfilled related cycle highs and signaled the onset of a second wave down.
January 6th was the ideal time for a secondary high, based on a myriad of cycles and timing indicators, and ushered in the second Danger Zone since the late-November ’24 cycle peak.
Initially, that Danger Zone stretches into January 17/20th… with a 1 – 2 week low expected near or during that time frame. However, as explained previously, these overall declines could last into February or even March/April ’25.
Not only did a January 6th peak fulfill daily cycles in those indexes, and provide the ideal time for a rebound peak based on the daily trends, it also produced the ideal time for an intra-month peak based on the open range of the month and a normal ‘head-fake’ before an intra-month downtrend…
The ideal time for an intra-month high – if a market is going to continue declining – is on the 3rd or 4th trading day of the new month, when a bounce is able to unfold without turning the new intra-month trend up. It also ended up being the perfect time for a rebound peak based on the declining daily 21 Low MACs and the upside targets for those indexes.
The S+P Midcap was expected to spike a little higher into January 6th and test 3180 – 3200/IDX before a new sell-off. That is exactly what took place as that index continues to lead the way lower.
Corresponding upside targets, previous lows (support turned into resistance), and declining daily 21 Low MACs were at 43,100 – 43,300/DJIA, 2310 – 2320/QRH & 16,200 – 16,400/ DJTA… the ideal ranges for rebound peaks on January 6th.
The NQ-100 had related targets & resistance levels at 21,866 – 21,940/NQH. That created the potential for a weekly (or outside-week) 2 Close Reversal Combo IF the NQ-100 closes below 21,516/NQH on January 10, 2025. The NQ-100 has already dropped below that level, increasing the potential for that 2CR signal to be generated on Friday.
All the indexes tested those target/resistance zones on January 6th and quickly reversed lower, setting an initial intra-month (and intra-year) high. Confirmation is needed to validate those highs.
There were also a pair of future cycles reinforced by the January 6th highs…
On a near-term basis, the S+P 500 has adhered to a 12 – 13 trading-day cycle since its mid-October high. That created a corresponding high-low-low-high-(high) Cycle Sequence that helped pinpoint the December 26th (secondary) high.
A subsequent 12 – 13 trading day decline was/is expected, which was reinforced by the January 6th high – at the 6 trading-day midpoint.
Both of those high-high cycles project a decline into January 15/16th (+ or – 1 trading day) – the ideal time for an initial intra-month low if the intra-month trends turn down. That is likely to be the key for January…
It would take daily closes below the January 2 – 6th lows to turn the intra-month trends down and project selling into January 15 – 17th (mid-month).
That is also what it would take to validate the January 6th cycle highs and elevate this decline to the next higher magnitude…
As already discussed, a high on January 6th was also needed to reinforce weekly cycles in the DJ Transportation Average…
In other indexes, this correction could stretch into March/April ‘25 – the convergence of multiple cycles & Cycle Progressions including an 18/19-month low-low-(??) Cycle Progression, a 2-Year Cycle (DJIA peaked in late-Nov ’22 and sold off into March ’23) and an annual cycle that timed intra-year lows in 2020, 2023 & 2024.
March 2025 is also when XLE & XOI cycles portend a future low, potentially corroborating future lows in indexes like the S+P 500 (more energy heavy).” TRADING INVOLVES SUBSTANTIAL RISK
Stock Indexes are adding corroboration to sell signals triggered in late-Nov/early-Dec ’24 after the S+P Midcap, DJTA & Russell 2000 peaked on November 25th. Those highs were set in precise lockstep with repeatedly-published cycles and right at major upside targets – setting what was projected to be 3 – 6 month (or longer-lasting) peaks in late-Nov. ’24. They are projected to undergo sharp declines in 1Q 2025… and potentially longer.
January 6th ushered in the time for another sell-off into mid-January – a likely precursor to future declines in February/March 2025. A low in mid-January would project cycle focus to mid-March ’25.
The 17-Year Cycle remains focused on 4Q 2024 as the most likely time for a major peak in equities. In line with that, the DJIA is already revealing parallels to late-2007/early-2008. Cycles and timing indicators are already identifying the next likely time frames when a future sharp sell-off is likely… after a rebound from mid-January cycle lows (see publications for details).
How Do November 25th Highs Corroborate Outlook for 1Q ’25 Sell-off?
How Does January 6th High Corroborate Intermediate Outlook?
Will Stock Indexes Fulfill Downside Objectives in March/April 2025?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.