Stocks Fulfilling 1st Phase of ‘Danger Period’; Mid-Sept ’23 Ushers in 2nd Phase.
08/14/23 – “Stock indexes entered the late-July/early-August ‘danger period’ and began to sell-off, with several of them turning their daily trends down. However, they have not yet shown significant negative signals, leaving them in neutral territory on a 1 – 2 month basis. This vulnerable period extends into late-Aug ’23 so another wave of selling is still possible after a brief bounce. Aug 21 – 25 remains the greatest focus of related cycles.
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. (A future high would be expected in mid-Sept ’23.)
Coinciding with that peak, the Russell 2000 reached its 3 – 4 month upside targets (stemming from its March ’23 low) at 2000 – 2015/QRU. Along with other corroborating indicators, that is where the rising monthly 40 High MAC and declining monthly 21 High MAC converged (see Aug ’23 INSIIDE Track for additional analysis and illustrations).
This came after it rallied into late-July ’23 – the convergence and/or fulfillment of multiple timing indicators and cycles. It also initially fulfilled the monthly LHR indicator. Since then, the Russell 2000 has neutralized its weekly uptrend AND its intra-year uptrend – both signs that confirm a multi-week top. This initial decline could drop back to (at least) ~1840/QRU – where 1 – 2 month support exists.
For the past ~2.5 years, the Russell 2000 has set a multi-week, often multi-month, low every 21 – 22 weeks. That has occurred six straight times and could recur if the it sells off and sets a low between mid-Aug and early-Sept. That would also fulfill an ~11-month high-low-(low) Cycle Progression. The ideal time (greatest synergy) for that low would be on Aug 21 – 28, ’23…
On a broader basis, stock indexes continue to trace out a large, multi-year topping phase that began with 1 – 2 year (or longer) peaks in late-2021/early-2022, subsequent 1 – 2 year lows in June/Sept ’22, and could be followed by [reserved for subscribers]…
On a near-term basis, stocks could see a multi-day bounce and then a new sell-off.”
Stock indexes are fulfilling ongoing analysis for multi-month peaks to take hold in late-July/early-Aug ’23 and usher in a 3Q ’23 ‘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 down to ~1840/QRU into the second half of Aug ’23. A subsequent bounce into mid-Sept ’23 would then usher in a second, more significant ‘danger period’ in equities.
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.