Stocks Fulfill Initial Targets; Enter Brief Pullback. New Rally to Follow.
11/02/22 INSIIDE Track Update – “Stock indices rallied into mid-week and then/now entered the expected pullback after the DJIA fulfilled the potential for at least a 15% gain from its Oct 13, post-CPI spike low. The daily & intra-month trends should help determine if this is only a 3 – 5 day peak… or something longer-lasting. (Most indexes just dropped to weekly support & daily HLS levels.)
This (initial?) rally took the indexes higher into early-Nov ’22 – fulfilling the initial outlook from the Oct 13 & Oct 20 signals and bringing them to a pivotal juncture when they should determine if further upside is likely.
In doing so, it paralleled the action of October – when a surge into the first 2 – 3 trading days led to a quick sell-off. The DJIA’s rally into Nov 2 also fulfilled its Oct 14 weekly 2 Close Reversal buy signal – that projected 2 – 3 weeks of subsequent upside as the first surge. Most other indexes corroborated that, also projecting surges into the opening days of Nov ’22. New buy signals are needed to extend these advances.
This also comes after the DJIA neutralized its weekly downtrend for the second time on Oct 28 – pinpointing the current week as a pivotal time when an initial (or final) peak could take hold. In order to turn that weekly trend positive, and project additional upside that could ultimately stretch into early-Dec, it would need to give a weekly close above 32,889/DJIA.
The recent surge has fulfilled the minimum expected from an intriguing ~12-Year Mid-Term Election Cycle. There is a reinforcing ~24-Year Cycle (1974 – 1998 – 2022) that helped hone expectations for this rally…
1962 – ~12% gain // 1974 – ~20% gain (from Oct ’74 low; before dropping back to low in Dec ‘74)
1986 – ~11% gain // 1998 – ~20% gain
2010 – 8 – 10% gain // 2022 – 15 – 20% gain??
2022 is the latest of these with strong rallies projected for Oct/Nov ’22. As stated previously, a ~15% gain would take the DJIA back to ~32,950. It just spiked up to 33,071/DJIA before retreating.
A ~20% gain – also seen in 1998 & 1974 (though the Oct/Nov 1974 rally – after advancing 20% from the Oct ’74 low – headed back to its lows in Dec ‘74) – would take the DJIA back to ~34,400/DJIA… right where the synergy of more bullish upside targets converge.
For now, the key is the intra-month trend pattern (which is likely to dovetail with the daily trend patterns)… If they fail to close below the Nov 1 – 3 lows, it would show resilience and project a rally back to recent highs – and likely higher – leading into mid or late-Nov.
1 – 2 month traders could have entered long positions in stock indexes on Oct 20 near ~30,200 – 30,450/DJIA, ~3645 – 3710/ESZ & ~10,950 – 11,150/NQZ and [reserved for subscribers].” TRADING INVOLVES SUBSTANTIAL RISK!
Stock indexes are holding late-Sept/early-Oct lows and projecting the largest advance in 2022 – capable of reaching 34,200 – 34,600/DJIA (see Oct ’22 INSIIDE Track for details). They have fulfilled 9 – 12 month downside wave structures and project a higher-magnitude rally in the coming month(s). Many other cycles & indicators concur. Oct 13 & 20 buy signals corroborate!
How Would Late-Sept ’22 Low Reinforce Overall 2022/2023 Outlook?
Why is Higher-Magnitude Rally Very Likely in 4Q ‘22??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.