Stocks Fulfilling Late-October Buy Signals; DJIA on Course for Surge Above 39,000!
01/04/24 – “Equities rallied from cycle lows in late-October, initially fulfilling the outlook for overall advances (from late-2022 & early-2023) into Jan/Feb 2024 – when a more significant peak is expected. 3 – 6 month peaks are expected in this time frame as multi-year cycles begin to pave the way for another significant sell-off in 2024/2025…
On a 1 – 2 year basis, the DJIA remains on track to ultimately reach its multi-year LLH (39,107/DJIA) – potentially in January ’24 – and fulfill a major upside objective created by its 2020 & 2022 lows.
That level is reinforced by a multi-year range target at 39,000 – 39,200/DJIA, incorporating the Sept/Oct ’22 lows near 28,700, the Feb ’22 & Oct ’23 ‘midway’ lows near 32,200, and the Aug ’21, Feb ’22 & July/Aug ’23 highs near 35,700/DJIA.
When the DJIA closed above 35,700 in late-Nov ’23, it corroborated the late-October signals & reinforced projections for a surge above 39,000/DJIA. A spike above 39,000/DJIA would also double the magnitude of the previous ~90-degree decline – from late-July into late-Oct ’23…
2024 Cycle Highs
All of the indexes are going through a lengthy topping process, reinforcing the potential for a repeat of the 17-Year Cycle (of stock market declines) in 2024/2025 (see page 2). That would perpetuate an uncanny cycle that timed 20 – 50% declines in 2007/2008, 1990, 1973/74, 1956 & 1939… AND coincided with Middle East wars.
Price and wave structure is reinforcing this potential. Several indexes – including the DJTA (and DOWU, DOWC), Russell 2000 & S+P Midcap 400 – remain well below their 2021 peaks, reinforcing that this entire rally is a large-scale ’B’ wave bounce following the ’A’ wave decline that bottomed in June & Sept 2022. A similar – or larger – magnitude ’C’ wave decline should follow.
In some respects, this could parallel the action seen in 1966 – 1970, when stocks initially peaked in January 1966 and then sold off into Sept ’66. They set an initial (’A’) wave low and then rallied into late-1968 when they set a ’B’ wave peak while retesting the 1966 high.
That was followed by a ’C’ wave decline into June 1970 – when the DJIA dropped well below its September ’66 low. Adding to the parallel, the Jan ‘66 peak was set ~4-years (49 months) from its preceding peak in Dec 1961. Similarly, the January ‘22 peak was set ~4-years (48 months) from its preceding peak in January 2018.
Those peaks were set ~2.5 years (28 & 31 months) from preceding peaks in July 1959 & May 2018. Those 1959 & 2018 peaks were initial 6 – 12 month peaks set after 9 – 10 year bull markets, reinforcing a series of parallels from the 1960’s.”
Stock Indexes fulfilled the projected 4Q 2023 advance, stemming from the intermediate buy signals generated after they fulfilled downside price & timing objectives on Oct 27/30, 2023. Additional highs are still likely in January 2024 – likely stretching into the second half of the month – in order to fulfill the latest phase of the uncanny 2-Year Cycle that recurs in January/February 2024.
Will DJIA Reach ~2-Year Upside Target (from late-2022)?
Why Would That Set the Stage for February – May 2024 Shift?
What is in Store for 2024/2025?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.