Stocks Fulfilling Projected Nov. ’21 Sharp Sell-offs; Add’l Selling Possible.
11/29/21 INSIIDE Track – “Equities are fulfilling intermediate analysis for a peak in early-Nov followed by sharp sell-offs into late-Nov/early-Dec. A few indexes remain capable of setting high highs in 1Q ‘22 before a larger-magnitude correction…
Stock Indices fulfilled upside objectives – in time and price – surging into Nov 4 – 9 and setting another multi-week peak. That was projected to be the interim high between a preceding peak in early-Sept ’21 (2 months prior) and a projected peak in early-Jan ‘22 (2 months later). In between, weekly cycles were/are portending an intervening low in late-Nov/early-Dec (depending on the stock/index).
10-29-21 – “In all these indexes, there is likely to be more whipsawing – back and forth – between now and the next multi-month cycle high (likely in 1Q ‘22). The NQ-100, Russell 2000 and other indexes have the potential for another intermediate low in early-Dec. ‘21.”
As described all year, the expected 1Q ‘22 peak could be another divergent one with some stocks/indexes setting higher highs while others set equal or lower highs. That is reinforced by the price action, and price objectives met, during the surge into early-Nov. By reaching key upside price and wave targets, some key indexes projected ‘a more substantial sell-off’ in Nov ‘21 (more substantial than 3Q ‘21 declines) – in line with last month’s analysis…
The Russell 2K fulfilled that wave objective and a host of decisive upside targets – and along with most indexes fulfilled ~60-day/~2-month low-high-high-high-(high) Cycle Progressions during intermediate cycle highs on Nov 4 – 9 – while peaking right at its multi-year upside trading range target (2460/QR).
That trading range was set by the early-2020 peak near 1710 and the ensuing March ’20 low near 960 and projected a surge to 2460/QR after the Russell 2000 broke above 1710 in Nov ’20 (1710 high – 960 low – 1710 – 2460/QR peak; see diagram at top of page 5). It fulfilled that during early-Nov cycle highs.
By spiking to new intra-year highs (fulfilling its weekly trend and monthly trend patterns) AND fulfilling its Elliott Wave objective AND attaining this multi-year upside target, the Russell 2000 ushered in the time for a sharper decline in Nov ’21… and potentially longer after completing its wave structure.
That 2460/QR objective had been reinforced by the Mar ’21 low (~2085/QR) – precisely at the midpoint of that overall projected trading range (1710 – 2460), a key level that supported declines in May, July & Aug ’21. For the majority of 2021, that support (2085/QR) held multiple pullbacks while creating a corresponding (upside) trading range target at the same 2460/QR level (1710 – 2085 – 2460/QR)… crucial synergy!
The lower diagram on page 5 illustrates how these ~375.0/QR & ~750/QR ranges have enveloped most of the intermediate and larger-degree swings since the 2009 bottom. As long as the early-Nov peak of 2460/QR holds, the Russell 2000 is focused on ~2085 and the potential for a drop to that support.
2085/QR is now also the ‘4th wave of lesser degree’ support (the low before this culminating rally) – heightening its significance. That identifies it as pivotal support for this latest correction AND the breakdown point if an even larger-magnitude sell-off is in the cards (that would be signaled by a weekly close below 2085/QR).
In the same month the Russell 2000 was fulfilling that synergy of upside targets, the NQ-100 peaked right at its multi-month upside target (~16,700/NQ) and reversed lower – with key support near 15,700/NQZ. (Short-term action is showing why another sell-off could be seen in early-Dec.).
Another (leading) index also fulfilled major upside objectives in Nov ‘21 – related to a potential wave ‘5’ surge and culmination. In that case also, the attainment of a major upside target reinforced the potential for a larger-scale decline in Nov/Dec ’21.
As explained last month, the DJTA bottomed in late-Sept and projected a new impulse wave higher (’5’). The May – Sept ‘21 decline was the largest correction since 1Q ‘20 and its longest correction since 4Q ‘18 (all linked by the 16-Month Cycle). On Oct 15, the DJTA closed back above its weekly 21 High MAC and reinforced those bullish signals. That spurred a surge into Nov. 2 when the Transportation Average was the first index to fulfill upside objectives and signal that a multi-week/multi-month correction should follow…
The most important takeaway from stock market action in Nov. ‘21 is that many significant stocks and indexes have fulfilled 1 – 2 year upside targets – on multiple levels – ushering in a potential topping process that could stretch into 1Q ‘22… They have also completed wave structures that augur a significant correction. Even the NQ-100 is reflecting waning strength. Last month’s issue highlighted that fact:
10-29-21 – “The NQ-100 bottomed above support (~14,100) and has since rallied back to the highs – signaling a wave ‘5’ of its own (though on a different magnitude than that of the Russell 2000) – stemming from the Mar ‘21 low… Since initially peaking in Feb. ’21, the NQ-100 has had three successive corrections – each one bottoming right at the rising weekly 21 Low MAC.
The second and third ones represent the ‘2’ and ‘4’ wave corrections in the 5-wave sequence that has unfolded since the early-Mar ‘21 low. The weekly trend shows that this latest rally does not have the same underlying strength as its predecessors – another earmark of a wave ‘5’ rally. As a result, it might not spike too much higher than the early-Sept high…
So, there is quite a bit of synergy coming into play in 2022 as equities remain above multi-month and intra-year support levels during recent corrections. That does not, however, preclude the potential for another sharp sell-off in Nov ‘21 (potentially stretching into the first half of Dec. ‘21).”
That wave structure projected a lesser-degree wave ‘5’ peak in Nov. ‘21… even as it increased the potential for a sharp sell-off in Nov and possibly Dec ‘21.”
Stocks are fulfilling the outlook for sharp sell-offs in Nov ’21, potentially stretching into the first half of Dec ‘21. The NQ-100 reached multi-month upside targets surrounding 16,700/NQ and signaled a wave ‘5’ peak that projected a subsequent sell-off – likely to extend into Dec ’21.
In early-Nov, the Russell 2000 fulfilled its monthly & weekly trend patterns as well as Elliott Wave structure – all of which projected a final surge following the Sept 20 cycle low. It reached pivotal upside targets near 2460/QR, projecting a subsequent (larger-magnitude) sell-off toward 2085/QR.
The DJTA was similar – reaching multiple major upside price targets in early-Nov and setting the stage for a multi-month (or longer) peak. Continued divergence is expected as the equity markets prepare for what could be a dramatic shift in 2022.
What are ramifications of DJTA, Russell 2000 and NQ-100 attacking multi-month or multi-year upside targets? What does this mean for next sell-off??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.