Stocks Hold Resistance; Oct 7 = ‘Dangerous Day’.
10/06/22 INSIIDE Track Update – “Stock indices surged this week, powerfully validating analysis for a bottom by Sept 30… after a sharp sell-off from mid-Sept when cycles and key indicators pinpointed a secondary peak followed by a sharp sell-off.
That decline lasted into the latest phase of a 14 – 15-week high-low-low-(low) Cycle Progression – one of the two most consistent NQ-100 & DJIA weekly cycles over the past ~15 years – that projected an intermediate bottom no later than Sept 30.
Overlapping, and corroborating, that was an offset 15 – 16-week high (Nov 8 – 12, ’21) – low (Feb 21 – 25, ’22) – low (Jun 13 – 17, ’22) – low (Sept 26 – 30, ’22) Cycle Progression – most obvious in the Russell 2000… the index that has helped lead several of the multi-month turning points in recent years.
The latest decline had the S+P 500 attacking 3 – 6 month support at 3560 – 3610/SPX while the NQ-100 re-tested 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).
Those price targets reinforced the timing for a low.
Equally important was the action of the weekly trends. The rally into mid-Aug ’22 fulfilled multiple cycles and 2 – 3 month upside objectives without turning the weekly trends up. That projected a drop back to the June ’22 lows in stock indexes.
The Sept 30 low arrived 1 – 2 days after most indexes fulfilled their mid-Aug weekly trend sell signals… Stock indexes have rallied toward their monthly resistance levels, neutralizing their daily downtrends multiple times in the process…
The fact that stock indexes have rallied to their descending daily 21 Low MACs and failed to (yet) turn their daily trends up pinpoints tomorrow as a dangerous day. If the employment numbers (and related factors) are not positive for stocks, it could send them back down for a retest of their recent lows… so caution is advised!”
Stock indexes sold off into the recurrence of an uncanny ~15-Week Cycle that projects a 1 – 2 month bottom by/on Sept 30, reinforced by several indexes dropping to new 2022 lows. More importantly, they have fulfilled 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.