Stocks Fulfill Downside Targets & Weekly Cycle Lows; Prepare for Bottom.
10/01/22 Weekly Re-Lay – “Stock indices have dropped below their mid-June lows, fulfilling the weekly trend and intra-year trend signals of mid-Aug and cycle downturn in mid-Sept. This reinforces the overall outlook for 2022/23 even as weekly cycles could produce a longer-lasting low at any time…
Stock Indices – after fulfilling analysis for another set of multi-week highs on Sept 12 – 16 – have plunged to new intra-year lows, fulfilling their mid-Aug weekly trend sell signals (that projected drops back to their mid-June lows).
The Sept 13 highs ushered in a new bearish cycle – similar to the weeks following the April 19 – 21 cycle high – and prompted stocks to plunge into a 14 – 15-week high-low-low-(low; Sept 21 – 30) Cycle Progression – one of the two most consistent NQ-100 & DJIA weekly cycles over the past ~15 years.
These new lows reinforce the significance of the mid-Aug ’22 highs, when the DJIA fulfilled its final upside price target (for the mid-June & mid-July buy signals), peaking precisely at ~34,200 while fulfilling the forecast for the largest rally of 2022… as the DJTA perpetuated a ~20-week high-high cycle and completed rebounds of equal time and magnitude.
That signaled the DJIA had completed its 3Q ’22 rally & was peaking one week after the 14 – 15 week high-high-high Cycle Progression projected. That high fulfilled an overriding 33-week high-high-(high) Cycle Progression (almost equal to an ~8-Month Cycle, which is typically ~34/35 weeks) – adding synergy to the reasons for a multi-month peak.
At the time, most indexes retested their year-opening lows – the most decisive level of resistance for the prevailing intra-year downtrends (13,728/NQ = Jan ’22 low; 13,720/NQ = Aug ’22 high, etc.) – and immediately reversed back down. That confirmed those intra-year downtrends…
The latest decline has the S+P 500 attacking 3 – 6 month support at 3560 – 3610/SPX while the NQ-100 re-tests a myriad of downside targets and 3 – 6 month support levels at 10,700 – 11,100/NQ (2022 HLS, multi-year range-trading support, 50% retracement of Dec ’18 – Nov ’21 advance, test of the Sept/Oct ’20 lows).
The DJIA has given a weekly & monthly close below related support (~29,200/DJIA), further validating projections for a 1- 2 year decline in 2022/2023. With some indexes declining in a 5-wave sequence, an impending low could hold longer than previous ones.”
Stock indexes have sold off into the recurrence of an uncanny ~15-Week Cycle that projected a 1 – 2 month bottom by/on Sept 30, reinforced by several indexes dropping to new 2022 lows. More importantly, they have completed 9 – 12 month downside wave structures and project a higher-magnitude rally in the coming month(s). A bottoming phase should now begin to unfold… and could lead to a 15 – 20% DJIA gain in 4Q ’22.
On a broader basis, stocks are reinforcing longer-term analysis for a 1 – 2 year peak in early-Jan ’22 followed by a 6 – 12 month plunge in 2022. See related publications for additional analysis.
How Would Late-Sept ’22 Low Reinforce Overall 2022/2023 Outlook?
Why is Higher-Magnitude Rally Expected in 4Q ‘22??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.